MULGREW'S THEORY THAT THE LUMP SUM PAYMENTS ARE TOO LARGE TO GET IN FULL RIGHT NOW DEBUNKED

The following question was asked at the May Delegate Assembly to UFT President Michael Mulgrew.

From our report:
Question: City has surplus. Can we get lump sum payments early? (payments we will be getting in October of 2017, 2018, 2019 and 2020 for work we did from 2009-2011 that other unions received in those years)
Mulgrew Answer: Other unions had to pay to get lump sum payments on time. Ours is too large. We can't get it early.

This is how NYC Educator recorded the same question and answer:

CL--City has surplus--can we get lump sum payments early?
[Mulgrew]: Issue is our lump sum payment is so large, other unions were much smaller, city made them pay to get in on time. Some unions gave up Welfare Fund payments. Sorry, can't be early.

Is Mulgrew accurate that our payments are too huge. One of our readers asked an expert at the city's Independent Budget Office. The expert's answer was posted here on December 23. I will repeat it fully below to invalidate Mulgrew's statement that the payment is too large. The cost to the city was estimated at a maximum of $560 million according to the IBO expert but would actually be less because those who resign or are terminated do not get the payments.

The FY 2018 NYC Executive Budget is $84.86 Billion according to the city's Budget Summary. Our $560 million (less because of attrition) would cost the city a little over a half of one percent (.00656% to be a little more precise) of its budget if we were paid back in full this fiscal year. We would not put the city in bankruptcy but the UFT won't even ask for what is rightfully ours.

We have already ascertained that negotiating is not one of Michael Mulgrew's chief talents. I think we can safely conclude that math is not one of his major skills either. Then again, 75% of teachers and 77% of UFT members trusted the union that this was the best we can do and voted for the contract. People like me were not able to convince the masses to vote no. I only got a near unanimous no vote at Jamaica (one abstention from someone who was about to retire).

December 23, 2016 ICE Blog Posting:

I sometimes can still be a little surprised by the extent to which the UFT was taken to the cleaners by the city and the Department of Education in the last contract in 2014. A reader wrote to the Independent Budget Office to find out how much our lump sum payments would cost the city.

This is the money we worked for between 2009 and 2011 that we essentially loaned to the city. NYC is paying us back with no interest in installments. The first payment was in 2015. We get nothing this year but the remainder of the loan will be paid back in 2017, 2018, 2019 and 2020.

How much will this cost the city?

The IBO expert estimated the maximum our loan will cost the city is $560 million but said it would be less because of all the UFT members who will resign or be terminated by 2020 and so won't be paid back in full.

Overall, the city is planning to spend $82 billion in this fiscal year. Paying back our loan will not even cost the city anywhere close to 1% of the budget. Add the large reserves the city has and there is little doubt that we are being ripped off big time by the 2014 contract.

I do not expect the city to feel sorry for us and give us our money back early but how could teachers not be angry about being ripped off so badly compared to other city employees who had this money years ago? We still only have half of the salary increases other city employees received from 2008-2010 added to our regular checks. The full amount won't be added until May 2018. 

From the Independent Budget Office:

I am replying to your email sent to Ronnie Lowenstein regarding the “bonus” payments to be made to members of the UFT as per the collective bargaining agreement of 2014.  I assume in referring to bonus payments you are in fact referring to the retroactive lump sums to be paid out on October 1^st of 2015, 2017, 2018, 2019 and 2020.

While IBO does not have an exact cost for how large these retroactive lump sums will be, because they are directly linked to the number of union members who will be employed on the days the payments are scheduled to be made, we can estimate the maximum cost of these lump sums based upon the total PS costs for pedagogical employees in 2009-2011.  Based upon the total PS costs from those years we estimate that the entire lump sum payment would be a maximum of $560 million if every member were to remain employed by the DOE through 10/1/20. 

This total would translate to a maximum of $70 million paid out in 2017 and $140 million paid out in 2018 – 2020.  These funds, if not already accounted for in DOE’s financial plan, would increase the city-funds portion of DOE’s budget by less than one percent in 2017 and around one percent in each subsequent year.   

IBO has not made any estimates about what the final cost of this portion of UFT’s collective bargaining agreement would be although we assume, as a result of attrition and other separations, that it will somewhat less than the $560 million.   

While I can’t say for certain, and I am looking into it further, I do believe that these costs are included in DOE’s financial plan.  As you surmised there likely is no breakdown of PS funding which would allow you to see the budget for regular salary segregated from these lump sums.  If I am able to find any more clarity on this issue I will keep you informed.

Thank you for reaching out, if you have any furthers questions or concerns feel free to contact me.