Thursday, August 06, 2015


A somewhat forgotten aspect of the current municipal union seven year contracts is $3.4 billion of health cost savings the unions agreed to. Politico New York (formerly Capital NY) reported that the city has achieved its savings goals for the first two years but we still really don't know about the future.

In the current round of collective bargaining, the UFT set an abysmally low municipal union pattern for salary increases by agreeing to 10% over 7 years plus a month and we also agreed to let the city add the 4% + 4% that other municipal union workers received from 2008-2010 in stages so we won't have the money fully added to our salaries until 2018. In addition, the money we already worked for from 2009-2011 that the city owes us won't be paid to us fully until 2020 and without interest.

Throw into this mix weaker and even non existent tenure protections for Absent Teacher Reserves and we have one ungenerous contract. (ATRs automatically resign if we miss two mandatory interviews which because of communication mix ups happened last year on too many occasions.) One result of our substandard settlement is we helped produce a gargantuan $5.9 billion city surplus. Meanwhile, Bloomberg style management continues in the schools so it should be easily understood why teachers might not have the highest morale these days. This is not the end of the story. We still haven't come up with the bulk of the health cost savings we owe the city.

Those $3.4 billion in health cost savings are being used to fund some of our minimal salary increases. The big bill for these savings is coming soon. The Politico NY story said the healthcare savings targets for the first two years of the contracts of $400 million and $700 million were met or will be achieved. Politico calls those savings "low hanging fruit." Meeting these targets where nobody really noticed is positive news. However, the health cost savings figure jumps higher in the next two years.

One solution being offered is to attempt to get more city workers to opt out of their health benefits by offering them higher cash payments in exchange.  We could live with that too.

However, buried deep in the Politico story comes this bit in the last paragraph:

The administration is looking at several other ways to reduce health spending, including increasing copays for emergency room visits, which, in theory, would encourage employees to avoid expensive visits unless they are true emergencies. 

I wonder what other ways to reduce health spending means in addition to higher ER visit costs. It looks as though we might be able to weather this storm without having healthcare premiums taken from our paychecks but I am not as optimistic that there will not be changes that will have the effect of reducing our benefits. Yes, municipal worker benefits are pretty good compared to what others receive but the municipal labor force is a huge pool of workers which should spread the risk and we are supposed to have powerful unions supporting us.

10% salary increases over 7 years + a month, retroactive money not paid fully until 2020, weaker due process for ATRs, no real working condition improvements and healthcare savings thrown in for good measure. This is with our so called progressive Mayor Bill de Blasio. The press should be crowing about how de Blasio tamed the UFT and other unions by negotiating a pattern setting contract that is more fiscally advantageous to the city than anti-union Republican mayors could achieve.

I'm not surprised by de Blasio's sinking poll numbers. His enemies are going to hate him no matter what he does and when a politician shortchanges his friends, they remember too. Union leaders might love our mayor but the rank and file I have spoken with are not enamored with him. It would be wise for the mayor not to cut any health benefits between now and Election Day 2017.


Jonathan said...

The danger was always allowing health care to become part of the contract and simultaneously giving an arbitrator the first and final say over whether "savings" were being met, and if he decided they were not, how to "achieve" (that is, how to make us pay) for those savings.

The early targets were easy. But for the bigger numbers at the end of the contract we never got anything more than vague hand-waving about where that money would come from.

There is real danger that Marty Scheinman will impose a seemingly minor - but possibly precedent-setting - cut on us in the last year of this contract.

Getting this section out of the next contract should be a high priority.

Jonathan Halabi

James Eterno said...

I agree Jonathan.

Anonymous said...

Don't believe for a second that we won't be contributing to our healthcare. This is the trend and it is already being established with other unions in the U.S. The ed reformers want to see it and both Herman Munster and Meathead Mike take their cue from that crowd.

NYCDOEnuts said...

Just wanted to remind; no member ever had any say in that. The Union heads all voted to give the city the authority on and just after May 1st, 2013. No vote whatever would have changed that.

Also, to remind, most suburban districts pay toward their healthcare and have for years. The contracts are publicly available and the costs are more than we will ever ever pay (and the coverage is not nearly as good).

On the healthcare front, things could be much much worse.

James Eterno said...

What is the size of their populations? The city can easily get better rates because we have so many more workers. It spreads the risk. It is that simple. Article 3G of the contract covers health benefits so yes we have a say. We agreed to our share of these savings as part of our contract to pay for part of our paltry raise.

Bronx ATR said...

This contract is like a big stinking onion. The more layers that are revealed the more it stinks; and any way you cut it, it's going to bring tears to your eyes. The Post should be singing DeBlasio's praises and the teachers cursing him - but it's the other way around. I don't blame DeBlasio though- Mulgrew handed him a deal that he would be nuts not to take it.