MAYOR'S 2017 BUDGET ANALYZED

Mayor Bill de Blasio presented his 2017 executive city budget on Thursday.  He announced that the city's financial picture is positive but there may be storm clouds ahead. The budget is balanced and there is plenty in reserve.

Reserves for Uncertain Times 
• Retirees Health Benefits Trust Fund: $3.4 billion

• General Reserve: $1 billion 

• Capital Stabilization Reserve: $500 million

That's almost $5 billion for a rainy day.

The mayor admits the city's economy is doing very well.  According to the fact sheet the mayor released with the budget:

New York City's local economy is strong, adding over 200,000 new jobs since January 2014- the highest two year gain ever - for a total of 4.2 million jobs...NYC's population increased by over half a million people between 2000 and 2014, and the city saw an all-time high of 58.3 million visitors in 2015.

Clearly, the city has plenty of money. They can predict economic gloom and doom all they want but there is no doubt that the last few years has seen prosperity that has not been shared much with the city's workforce or school children.

The UFT contributed in a substantial way to the city's excess revenues by negotiating the abysmal municipal labor union pattern setting contract with 10% salary increases over 7 years in 2014.  In that deal we also agreed to take the money from the last pattern settlement (4%+4% set by DC 37), that former Mayor Michael Bloomberg refused to give us, in installments through 2020.

Other city unions are stuck with our increases because of pattern bargaining where one union settles on a contract that sets a pattern for raises and then other municipal unions get the same increase. Uniform services received only 1% over the Mulgrew pattern. The Patrolmen's Benevolent Association arbitration, which the law says can only cover two years, was for 1% and 1% for 2010-2012. They too are also tied in a substantial way to the UFT pattern.

It is so obvious after the PBA arbitration that reaffirmed pattern bargaining that the UFT made a huge error by agreeing to defer our salary increases and back pay from that last DC 37 pattern until 2020, particularly when the city has so much money. For that alone, Mulgrew should not be reelected.

The mayor in his budget speech also boasted about workforce healthcare savings, some of which are still to be implemented. Here is what the fact sheet on the budget says:

When  Mayor de Blasio took office on January 1, 2014, all of the City's labor contracts were expired. Since then, the City has settled almost all contracts - covering 94% of the workforce - through responsible settlements with both civilian and uniformed employees, while securing $3.4 billion in unprecedented, guaranteed healthcare savings geared toward bending the cost curve.

For the 2017 fiscal year the UFT contract says we owe $1 billion of those savings. In fiscal 2018 it will jump to $1.3 billion. We've saved the city $1.7 billion already and in fairness to the UFT leadership, most of us have not noticed any significant differences in healthcare from the savings. Will that continue? According to Politico New York, fiscal 2018 is when we could be looking at some real changes on healthcare.

The city is also planning to save $587 million in Fiscal Year 2018 from a series of initiatives that anticipate a shift in how people approach health care, such as visiting emergency rooms less by relying on more cost-efficient outpatient centers and participating in "wellness programs" that focus on preventative medical procedures.

What is a cost-efficient outpatient center?

My guess is any kind of real changes will not take effect until after Mulgrew and de Blasio are safely reelected.

As for the schools, this year they are funded at 86% of full funding, an austerity level we've been stuck at for years even with all the surplus revenue the city has had with its prosperous economy. That number will only increase to 87% in many schools.

Here is what the mayor's fact sheet says:

• Raising the Fair Student Funding floor at all schools to at least 87% - and ensuring a citywide average of 91% - through an unprecedented investment of $159 in FY2017.  this will provide vital educational resources to students in historically underfunded districts.

For those expecting more money in their schools, here is what the UFT says in the weekly Newsletter for Chapter Leaders about how the money will be spent.

The preliminary 2017 budget that Mayor Bill de Blasio released on Jan. 21 calls for increasing budgets for nearly 660 New York City schools. His budget proposal also puts money behind the goals he mapped out for city schools in the fall, including more funding for Advanced Placement courses, counseling for students in two high-needs school districts, the “Algebra for All” initiative and the hiring of 400 literacy coaches to work with second graders.

Note there is nothing here on lowering class sizes. If the city is enjoying a long period of prosperity and we are not even close to 100% funding, what will happen when there is a recession?