IBO SAYS NYC CURRENTLY HAS THE FUNDS BUDGETED FOR EMPLOYEE RAISES AND LUMP SUM PAYMENTS (RETRO)

Today, the city's Independent Budget Office released a report examining the Mayor's April Executive Budget. While the city is facing some major fiscal challenges due to "tumbling tax revenues, shrinking reserves, growing budget gaps" caused by the COVID-19 pandemic, the money to pay municipal employee raises, including lump sum payments owed to us from the past (retro), is in the budget.

From page 22 of the IBO report:

Labor Costs. Currently, approximately 80 percent of all city employees are working under the terms of labor agreements for the 2017-2021 round of bargaining, with the rest still being negotiated or in a formal arbitration process. The Mayor’s financial plan includes funding for the estimated cost of settling the remaining outstanding labor contracts following the already-established civilian and uniformed patterns for the current round of collective bargaining. Funding for those remaining contracts is included in a centrally managed labor reserve fund; it is not allocated to the budgets of the affected agencies until contracts are signed. The April plan includes approximately $864 million in the current year and $1.9 billion in 2021 in the labor reserve, of which over 96 percent is expected to be used to pay for the cost of unsettled contracts in the current round of bargaining at the existing wage pattern plus lump sum payments owed under past contracts that remain to be paid out. (bold added by me)

Don't believe anyone who tells you the city can't afford to pay us for work that was done from 2009-2011. We are still waiting until October of this year to receive 25% of what we are owed.

As for the next round of collective bargaining in these difficult times:

The current financial plan also includes funding sufficient to cover the cost of 1.0 percent annual salary increases in each year of the next contract cycle, which would begin in 2022. In past years most annual salary increases have exceeded 1.0 percent, but given the current economic uncertainty it is likely that the city will take a hard line on negotiating larger increases. Conversely, many unions will likely push for higher remuneration for their members, particularly in light of the grave sacrifices that many of their members are making on the frontlines of the battle against the Covid-19 pandemic. 

What would additional increases above 1 percent cost the city for the next round of bargaining?

We estimate that for new contracts signed in 2021, each additional percentage point increase above the currently budgeted annual raises of 1.0 percent would cost the city $44 million, with subsequent year costing $258.2 million, $551.6 million, and $869.3 million in 2022, 2023, and 2024 respectively.

All I can add is municipal unions please don't let Michael Mulgrew or the DC 37 leader go into negotiate first and set the pattern for city contractual raises that all other city unions will receive. Teachers and everyone else will get that one percent and not much more if the UFT goes first, no matter what the city's financial picture looks like at that time. Union elections matter. 

I know, I know, the retirees control UFT elections but if the majority of the active teachers ever voted out Mulgrew/Unity, it could be a different world. If all the people reading this and a few thousand more organized instead of complaining or dropping out of the union, you could really change the teaching profession in NYC. The IBO in prognosticating the future beyond COVID-19 sees the national economy coming back and eventually the city too.

This is on page 7:

There will be no bounce back from the recession, however, until there is a vaccine or an effective treatment that would greatly reduce or eliminate fear of contracting the virus. Our forecast assumes that the pandemic will be resolved sometime in 2021. Based on this assumption, IBO projects that growth will gradually accelerate in 2021, with real GDP rising 2.3 percent for the year as a whole, followed by much stronger growth of 6.8 percent in 2022.

Pent up demand will matter in the long run. Patience is priceless.