Collective bargaining in New York involves the negotiation of wages, benefits, and work rules between public sector unions and government entities like the City, the MTA, and school districts. This page covers CBC’s work on municipal labor contracts, health insurance premium-sharing, binding arbitration, prevailing wage mandates, and pension reform.
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The Mayor should pursue a collaborative relationship with labor that recognizes their shared interest in a thriving city and a sustainable, efficient municipal government that provides good jobs and career paths for its employees.
The incoming administration should work with labor to share the fiscal benefits of increased efficiency to fund raises that otherwise may not be affordable, while bringing City spending in line with revenues.
The administration should pursue a path to fund raises above those already in the City’s budget by changing antiquated provisions within many of the 100-plus collective bargaining agreements, job titles, or other productivity measures.
The City must ensure labor is part of the solution by securing agreed-upon changes to work rules, job titles, health insurance, and other benefit administration structures to deliver services efficiently.
Key Data
In July 2026, CBC opposed a City Council bill (Intro 692-A) that would bypass collective bargaining and add $325 million in spending for paraprofessional pay just two weeks after the budget was adopted.
As of November 2025, the City's budget assumed annual raises of just 1.25% a year for the next round of collective bargaining, which is below historical averages.
In late 2023, CBC noted that recent collective bargaining agreements would add $16 billion in costs through 2027 without including offsetting productivity increases to help pay for them.
In late 2023, two ratified collective bargaining agreements exceeded the standard pattern, with the NYSNA contract costing roughly $540 million more and the MEBA agreement costing an additional $54 million over the financial plan.
In May 2023, CBC estimated that the NYPD's collective bargaining agreement with the PBA would cost approximately $900 million in fiscal year 2024, including $550 million for wages and $350 million for fringe benefits and pensions.
The proposed City Council bill Intro 692-A, which mandates additional pay for paraprofessionals, would bypass the established collective bargaining process and add $325 million in unplanned spending. Determining employee compensation through legislation rather than at the bargaining table sets a dangerous precedent that could prompt other unions to seek similar off-cycle increases, threatening the city's fiscal stability.
Recommendations related to Collective Bargaining
Compensation should be negotiated through the collective bargaining process.
The City Council should reject Intro 692-A, as legislating compensation would wrongly circumvent the collective bargaining process.
If Intro 692-A is passed, the Mayor should veto it to ensure employee compensation continues to be determined at the bargaining table.
The City should continue to determine employee compensation at the bargaining table, not the legislative chamber.
Key Data
$325 Million
— The amount of additional spending Intro 692-A would add just two weeks after the budget was adopted.
The City's preliminary budget faces fiscal challenges, including a $6.7 billion gap, and relies on one-shot resources like the Rainy Day Fund to balance expenditures. To improve efficiency and fiscal health, the administration is encouraged to partner with municipal unions to redesign work processes and consolidate union welfare benefit funds.
Recommendations related to Collective Bargaining
The Mayor should partner with municipal unions to redesign work processes and broaden responsibilities, then share the gains.
The City should consolidate union welfare benefit funds to achieve savings.
Key Data
$200 million
— Potential savings from consolidating union welfare benefit funds.
The incoming administration should pursue a collaborative relationship with labor to modernize work rules and improve efficiency, allowing for wage increases that are otherwise unaffordable. By updating antiquated provisions within the city's numerous collective bargaining agreements, the city can align spending with revenues while still providing competitive compensation for employees.
Recommendations related to Collective Bargaining
The Mayor should pursue a collaborative relationship with labor that recognizes their shared interest in a thriving city and a sustainable, efficient municipal government that provides good jobs and career paths for its employees.
The incoming administration should work with labor to share the fiscal benefits of increased efficiency to fund raises that otherwise may not be affordable, while bringing City spending in line with revenues.
The administration should pursue a path to fund raises above those already in the City’s budget by changing antiquated provisions within many of the 100-plus collective bargaining agreements, job titles, or other productivity measures.
Key Data
1.25%
— The budget assumes annual raises of just 1.25 percent a year for the next round of collective bargaining.
100-plus
— There are 100-plus collective bargaining agreements that the city manages.
New York City's fiscal stability requires negotiating labor agreements that align fair compensation with the city's actual financial capacity. Future mayoral leadership must prioritize rewarding labor productivity and sharing resulting savings to ensure sustainable municipal operations.
Recommendations related to Collective Bargaining
The next mayor should negotiate thoughtful labor deals that balance fair compensation and fiscal reality.
The next mayor should reward labor productivity and share the savings.
NYCHA's labor costs reached $1.5 billion in 2023, accounting for half of its total operating budget, with per-unit labor costs rising 7 percent from the previous year. Recent collective bargaining agreements failed to include necessary reforms to improve work rules, accountability, or operating efficiency, necessitating a new approach to negotiations.
Recommendations related to Collective Bargaining
The City and NYCHA should negotiate savings, boost productivity, and modernize property management through collective bargaining.
Key Data
$1.5 billion
— Personnel costs in 2023, which accounted for half of NYCHA’s public housing operating budget.
$2.9 billion
— NYCHA’s total public housing operating budget in 2023.
7 percent
— Increase in labor costs per unit from 2022.
Recent collective bargaining agreements provided reasonable raises but failed to include necessary productivity increases, resulting in $16 billion in added costs through 2027. To improve efficiency, the City must collaborate with labor to implement structural changes to work rules, job titles, and benefit administration.
Recommendations related to Collective Bargaining
The City must ensure labor is part of the solution by securing agreed-upon changes to work rules, job titles, health insurance, and other benefit administration structures to deliver services efficiently.
Key Data
$16 billion
— Added costs through 2027 resulting from recent collective bargaining agreements that lacked offsetting productivity increases.
The Metropolitan Transportation Authority faces potential budget gaps due to uncertainties in revenue and future labor costs, including the risk that future collective bargaining raises may exceed the budgeted 2 percent. To mitigate these risks, the agency must continue to pursue operational efficiencies and productivity improvements, which may require negotiating work rule changes with labor partners.
Recommendations related to Collective Bargaining
The MTA should work with labor partners to implement work rule changes to achieve operational savings identified through benchmarking productivity.
The MTA must ensure that future collective bargaining raises do not exceed the budgeted 2 percent to avoid exceeding spending projections for 2026 and 2027.
Key Data
2 percent
— Annual raises set aside in the MTA financial plan for the next round of collective bargaining starting in 2026.
$2.9 billion
— Potential operational savings identified from benchmarking productivity to other transit systems, which may require working with labor partners to implement work rule changes.
New York City's financial plan shifts funding for ratified collective bargaining agreements from the central labor reserve to agency budgets, though some recent contracts have exceeded established patterns. These above-pattern agreements, specifically with the New York State Nurses Association and the Marine Engineers’ Beneficial Association, create additional costs that must be accounted for in the city's budget gaps.
Recommendations related to Collective Bargaining
The City must determine if the above-the-pattern costs of the NYSNA and MEBA contracts are reflected in the November 2023 financial plan.
The City must calculate how much the NYSNA and MEBA contracts increase each year’s budget gap.
Key Data
$540 million
— The cost of the New York State Nurses Association contract that is more than the established collective bargaining pattern.
$54 million
— The additional cost of the Staten Island Ferry operator agreement over the financial plan.
New York City faces a significant fiscal cliff with a projected budget gap of up to $13.8 billion, exacerbated by $16 billion in unfunded union raises and increased spending on social services. To address this, the city must prioritize program efficiency, consolidate duplicative efforts, and foster collaboration between management and labor to improve operations.
Key Data
$16 billion
— The amount added to the budget for union raises that the city did not identify funding for.
New York City's fiscal year 2024 budget includes significant spending increases for new programs, pension contributions, and collective bargaining raises that far exceed the savings generated by the administration's efficiency programs. Additionally, future budget gaps are projected to grow to $11.5 billion by fiscal year 2027, a figure that excludes substantial costs such as the NYS Nurses Association arbitration award and asylum seeker expenses.
New York State Budget Fiscal Year 2024 Major Actions and Fiscal Risks As of First Quarter Update New York City Fiscal Year 2024 Adopted Budget and Outlook
The fiscal year 2024 budget agreement utilizes $2.3 billion in available resources to increase spending without necessary offsetting savings, while failing to incorporate productivity improvements into collective bargaining agreements. This approach delays essential fiscal stabilization and risks creating future service crises by funding major programs on a short-term basis.
Recommendations related to Collective Bargaining
The Administration, City Council, and municipal unions should collaborate to ensure the City can deliver services to New Yorkers at an affordable cost.
Future collective bargaining agreements should include productivity savings to offset their costs.
The New York City Housing Authority faces severe fiscal instability due to rising operating costs and stagnant rent collections, necessitating structural reforms to achieve long-term solvency. This financial strain is exacerbated by the authority's reliance on city subsidies, which is projected to grow significantly as it faces increased costs from upcoming collective bargaining agreements.
Recommendations related to Collective Bargaining
The City should seek to reform work rules, broaden job descriptions, reduce fringe benefit costs, and implement other operational changes to boost productivity and bring NYCHA’s operating costs in line with those of other property managers during upcoming collective bargaining negotiations.
The City and NYCHA’s federal monitor should utilize their extraordinary powers to modernize labor relations under the settlement agreement, which have largely gone unused.
The City must avoid offering pattern raises without securing any productivity gains, as this will only widen the structural deficit and increase reliance on City subsidies.
Key Data
$146 million
— Projected collective bargaining subsidy in City fiscal year 2023.
$191 million
— Estimated increase in the personal services budget by the fifth year if unions follow the pattern established by the District Council 37 contract.
$152 million
— Total overtime spending in 2022.
55%
— Increase in overtime spending since 2018.
10%
— Portion of NYCHA's 2022 personal services budget represented by the City's collective bargaining subsidy.
$35 million
— Estimated increase in the personal services budget in the first year if unions follow the pattern established by the District Council 37 contract.
The Metropolitan Transportation Authority must modernize work rules and benefits within its collective bargaining agreements to stabilize its operating budget and adapt to post-pandemic ridership demands. By implementing efficiencies such as expanding One Person Train Operation and updating shift-picking processes, the agency can secure necessary savings while supporting essential transit workers.
Recommendations related to Collective Bargaining
Transit workers need to return to pre-COVID attendance levels to improve service and cut overtime costs.
The MTA should expand One Person Train Operation (OPTO), which other systems embraced decades ago, to modernize operations.
The MTA and labor need to modernize how transit workers pick the time and location of their shifts using an online system rather than the current in-person, on-paper process.
The MTA and TWU should switch retirees to a high quality Medicare Advantage plan to restrain ballooning health care costs without reducing benefits.
The MTA and its labor partners must implement more creative and flexible work assignments and scheduling to improve service and adapt to riders’ needs.
Key Data
19
— The average number of days worked annually by subway and bus workers has shrunk by 19 days over the last two decades.
50 million
— Nearly 50 million subway and bus customer trips were canceled in 2022 due to crew shortages.
$400 million
— The MTA plans to save $400 million by increasing its own productivity.
$1.1 billion
— The Payroll Mobility Tax on New York City businesses was raised by $1.1 billion to help narrow future budget gaps.
$165 million
— City support of paratransit was increased by $165 million as part of the MTA stabilization plan.
$15 billion
— Drivers will pay $1 billion through congestion pricing to support $15 billion in infrastructure investments.
The NYPD's fiscal year 2024 budget is significantly understated by approximately $1.6 billion because it fails to account for the costs of recent collective bargaining agreements and ongoing overtime spending. These labor-related expenses, including retroactive payments and wage increases, create a substantial gap between the executive budget and the actual funding required for the department.
Recommendations related to Collective Bargaining
Budgeted overtime should reflect reasonable expectations given management, policy, and history.
The City should include the costs of the uniformed collective bargaining pattern in the budget to avoid understating spending.
The City should transfer the full cost of the PBA agreements from the central labor reserve to the NYPD’s agency operating budget and relevant central budgets.
Key Data
$1.6 billion
— Estimated total underbudgeting in the fiscal year 2024 budget for collective bargaining agreements and overtime.
$900 million
— Estimated increase in member compensation for the PBA agreement in fiscal year 2024.
$2.3 billion
— Total amount in the labor reserve to provide retroactive compensation for PBA members for fiscal years 2018 through 2023.
$550 million
— Portion of the PBA agreement cost allocated for higher wages in fiscal year 2024.
$350 million
— Portion of the PBA agreement cost allocated for fringe benefits and pension contributions in fiscal year 2024.
$300 million
— Estimated cost to extend the PBA collective bargaining pattern to the remaining NYPD uniformed force in fiscal year 2024.
New York City's Department of Education faces a potential $12 billion budget gap by fiscal year 2026, partly due to the exclusion of likely costs for collectively bargained raises. Extending the tentative District Council 37 pattern to all employees would add an estimated $2.1 billion to annual spending by 2026, significantly impacting the department's fiscal outlook.
Key Data
$2.1 billion
— Estimated additional spending in fiscal year 2026 if the tentative District Council 37 pattern is extended to all DOE employees.
$6.2 billion
— Total additional DOE spending through fiscal year 2026 if the tentative District Council 37 pattern is extended to all DOE employees.
$1.2 billion
— Amount DOE spending would be higher in fiscal year 2023 if labor costs are included.
$2,709
— Increase in per-student spending for K-12 DOE students in fiscal year 2026 due to the inclusion of labor costs.
New York City's budget faces significant gaps reaching $6.5 billion by fiscal year 2027, necessitating a Program to Eliminate the Gap to address fiscal instability. While the city missed an opportunity to utilize collective bargaining negotiations to improve operational efficiency, future efforts should focus on making work rules and job titles more flexible to preserve services and reduce costs.
Recommendations related to Collective Bargaining
The City should leverage collective bargaining negotiations to make work rules and job titles more flexible to increase operating efficiency and reduce ongoing costs.
Key Data
$6.5 billion
— projected budget gaps by fiscal year 2027
$8.8 billion
— amount the City may need this year and next
$14.0 billion
— potential future budget gaps by fiscal year 2027
23,000
— vacancies Citywide that allow agencies to meet savings targets
The New York City Department of Education faces significant fiscal pressure from declining enrollment and the expiration of federal pandemic aid, with per-student spending projected to rise significantly. This financial outlook is further complicated by the potential costs of extending the tentative District Council 37 collective bargaining pattern to all employees, which would push per-student spending to nearly $44,000 by fiscal year 2026.
Key Data
$44,000
— Projected per-student spending in fiscal year 2026 if the tentative District Council 37 collective bargaining pattern is extended to all Department of Education employees.
The New York City Housing Authority faces a structural budget gap driven by rising operating costs, deferred maintenance, and a significant decline in rent collection. To address these fiscal challenges and improve operational efficiency, the authority is urged to pursue structural reforms, including negotiating savings and productivity improvements through collective bargaining.
Recommendations related to Collective Bargaining
Negotiate savings and increased productivity through collective bargaining.
Key Data
$152 million
— Total overtime spending in 2022, which increased despite efforts to reduce it.
3 percent
— The increase in overtime spending in 2022, missing the goal of a 40 percent reduction.
40 percent
— The target reduction for overtime costs in 2022 that was not met.
The tentative contract agreement with District Council 37 provides reasonable raises but creates a significant fiscal challenge, with projected costs exceeding current budgets by $16.2 billion over the contract period. Consequently, the City's budget gaps are expected to widen significantly, reaching $10.6 billion in fiscal year 2027, necessitating productivity savings and careful negotiation of future contracts.
Recommendations related to Collective Bargaining
The effort to increase flexibility should be significantly expanded to identify changes in work rules and job titles that increase the efficiency of City operations, providing needed savings to offset the costs of raises, while increasing salaries and improving career paths.
The City should be implementing a growing, multiyear Program to Eliminate the Gap (PEG) in the Executive Budget to offset these multi-billion-dollar collective bargaining costs.
As the City negotiates other agreements and works to identify how best to adapt to remote work and flexible schedules, it should take great caution not to add economic costs to other contracts if remote work options vary.
Key Data
$16.2 billion
— The amount these raises would cost more than currently budgeted over the contract period, assuming this tentative agreement sets the pattern for all other unions.
$3.2 billion
— The City's current budget gap in fiscal year 2025.
$6.5 billion
— The City's current budget gap in fiscal year 2027.
$10.6 billion
— The projected City budget gap in fiscal year 2027 if the tentative agreement is implemented.
$2.5 billion
— The estimated additional spending in fiscal year 2023.
$2.3 billion
— The estimated additional spending in fiscal year 2024.
New York City's current budget only accounts for 1.25% annual wage increases, leaving a significant funding gap for future labor contracts. If annual raises are negotiated at 3%, the city would face an additional cost of $800 million in the first year, rising to $2.5 billion annually by the third year.
Key Data
1.25%
— Annual wage increases currently covered by budgeted funds.
3%
— Hypothetical annual raise percentage used to calculate potential budget impact.
$800 million
— Cost of 3% annual raises in the first year.
$2.5 billion
— Annual cost of 3% raises starting in the third year.
New York City health insurance costs are projected to rise by 8.5 percent annually through fiscal year 2026, necessitating structural changes to employee and retiree benefits. Implementing the agreement between the City and the Municipal Labor Committee, alongside broader policy reforms like premium sharing and benefit consolidation, is essential to reduce the City's long-term financial liabilities.
Recommendations related to Collective Bargaining
The City and the Municipal Labor Committee should implement the agreement regarding the Medicare Advantage Plus plan to restrain cost growth and reduce the City’s other postemployment benefit liability.
The City Council should pass Introduction 874 as a workable solution that allows the City-MLC agreement to move forward.
The City should repeal the law in whole regarding health insurance benefit specificity, as this level of detail should not be codified.
The City and the Municipal Labor Committee should undertake a comprehensive review of health and welfare benefits for employees and retirees to agree on policy changes that reduce costs.
The City and the Municipal Labor Committee should implement policy changes including premium sharing for employees and pre-Medicare retirees, elimination of some or all of the Medicare Part B reimbursement, and consolidation of union welfare fund benefits.
Key Data
8.5 percent
— The rate at which health insurance costs are budgeted to increase annually between fiscal years 2023 and 2026.
$200
— The approximate monthly premium for retirees who choose to remain in their current Medigap program.
$600 million
— The amount by which the City’s annual costs would be reduced by the Medicare Advantage plan.
New York City faces significant long-term fiscal challenges, with budget gaps projected to reach $4.6 billion in fiscal year 2025 and $5.9 billion in fiscal year 2026. These gaps are exacerbated by risks such as unbudgeted collective bargaining costs, which could increase by $800 million in the first year and $2.5 billion by the third year if employee raises are set at three percent annually.
Recommendations related to Collective Bargaining
The City must take action immediately to restrain spending over the long run to reduce future budget gaps caused by risks like unbudgeted collectively bargained raises.
To ensure future stability, the City must implement more transformative changes to its operations, as it cannot afford more recurring spending on programs given the fiscal challenges posed by factors like collective bargaining.
Key Data
$800 million
— The estimated increase in budget gaps in the first year resulting from employee raises of three percent annually.
$2.5 billion
— The estimated increase in budget gaps in the third year resulting from employee raises of three percent annually.
three percent
— The annual rate of employee raises used to calculate the potential increase in budget gaps.
The Metropolitan Transportation Authority faces significant fiscal instability, with recurring annual deficits of approximately $2.5 billion and additional risks from potential recession, lower ridership, and rising collective bargaining costs. To address these challenges, the authority must implement efficiency-focused operating reforms and restructure long-term debt while seeking new revenue sources to close remaining budget gaps.
Recommendations related to Collective Bargaining
The MTA should implement a multi-year phase-in plan that begins with management-led efficiencies and follows with implementing changes collectively bargained with labor over time to achieve recurring savings.
The MTA should seize the opportunity created by federal aid to implement efficiency-focused operating reforms to improve fiscal and operational stability.
The MTA should restructure its long-term debt to reduce its structural deficit before the region's transit system risks falling off the fiscal cliff.
Key Data
$220 million
— The projected increase in the annual deficit for 2022 due to risks including higher-than-expected collective bargaining agreement costs.
$800 million
— The projected increase in the annual deficit for 2023 due to risks including higher-than-expected collective bargaining agreement costs.
$1 billion
— The projected increase in the annual deficit by 2026 due to risks including higher-than-expected collective bargaining agreement costs.
$2.9 billion
— The amount of recurring annual savings identified that could cover much of the deficit, though many reforms require changes to collective bargaining agreements.
The upcoming November modification to the fiscal year 2023 financial plan faces significant budgetary risks, including potential revenue shortfalls and pension fund investment losses. Additionally, collectively bargained raises that exceed the currently allocated funds for 1.25 percent annual increases pose a further threat to the city's financial stability.
Key Data
1.25 percent
— The amount of annual raises currently supported by funds set aside in the financial plan.
New York City faces significant budget gaps that require careful management of upcoming union contract negotiations to ensure fiscal stability. By modernizing labor contracts, the city has the opportunity to reduce recurring costs and fund necessary worker raises without exacerbating the projected multi-billion dollar deficits.
Recommendations related to Collective Bargaining
The city should use the opportunity of negotiating contracts with its unions to modernize contracts to reduce recurring costs, fund workers’ raises and narrow budget gaps.
The city should reconsider whether 1.25% annual raises are the right amount for future collective-bargaining agreements, as the current set-aside may leave $1 billion to $1.5 billion per year unfunded if the city agrees to 3% raises.
Key Data
1.25%
— The percentage of the budget set aside as a down payment for future collective-bargaining agreements.
$1 billion to $1.5 billion
— The estimated annual unfunded amount for collective-bargaining agreements if the city agrees to 3% raises.
3%
— The percentage raise for city employees that would result in a $1 billion to $1.5 billion annual funding gap.
New York City's implementation of a Program to Eliminate the Gap, which includes identifying savings of 3% this year growing to 4.75% in future years, is a necessary step to stabilize the budget amidst rising costs like future labor contract obligations. To manage these expenses while raising employee salaries, the City should prioritize changing work rules and contractual components to improve efficiency.
Recommendations related to Collective Bargaining
Changing work rules and other contractual components to increase efficiency and provide PEG savings is the best way for the City to raise employee salaries without creating an unsustainable fiscal burden.
With New York City experiencing $4.5 billion in unexpected revenues, there is a critical opportunity to deposit $2.3 billion into the Rainy Day Fund and allocate $1.7 billion to the labor reserve. Fully restoring the labor reserve would offset the costs of future employee raises and significantly mitigate the fiscal risks associated with upcoming collective bargaining.
Recommendations related to Collective Bargaining
The City should add $1.7 billion to the labor reserve over the financial plan to fully restore the reduction, offsetting more of the cost of future employee raises and reducing the fiscal risk associated with collective bargaining.
Key Data
$1.7 billion
— The proposed addition to the labor reserve over the financial plan to fully restore the pandemic-era reduction and reduce fiscal risks associated with collective bargaining.
The New York City Police Department's fiscal year 2023 executive budget includes over $140 million in annual increases, primarily driven by collective bargaining agreements with the Detectives Endowment Association and Sergeants Benevolent Association. These agreements, which cost $119 million in fiscal year 2023, are funded through transfers from the labor reserve rather than increasing total city spending.
Key Data
$119 million
— cost of collective bargaining agreements in fiscal year 2023
$18 million
— annual overtime increase included in the collective bargaining funds for the Detectives Endowment Association and Sergeants Benevolent Association
$140 million
— annual increase to the NYPD City-Funded Budget, which is primarily attributable to collective bargaining agreements
New York City faces a potential $9 billion fiscal disaster by 2026 due to existing budget gaps, projected employee raises, and fiscal cliffs. To maintain stability, the city must leverage upcoming collective bargaining negotiations to increase productivity and generate the necessary savings to fund salary increases without compromising essential services.
Recommendations related to Collective Bargaining
The city should use this next round of collective bargaining contracts to further increase productivity, which would generate savings to fund raises and stabilize the budget.
The city must ensure that collective bargaining raises are affordable by utilizing productivity savings and higher tax revenue, as raises will otherwise be unaffordable.
Key Data
$4 billion
— Estimated cost of employee raises contributing to the city's potential fiscal disaster.
$1.5 billion
— Cost of 3% annual raises for city employees in the first year.
$4.3 billion
— Cost of 3% annual raises for city employees in the third year.
New York City's preliminary budget for fiscal year 2023 requires further structural reforms to achieve long-term fiscal stability, including more aggressive efficiency targets and better management of looming fiscal cliffs. To reduce unit costs and improve service delivery, the administration should pursue strategies such as modernizing contractual differentials and implementing work rule changes.
Recommendations related to Collective Bargaining
The administration should pursue modernizing contractual differentials to increase efficiency and reduce unit costs.
The administration should implement work rule changes to increase efficiency and reduce unit costs.
The administration should pursue the consolidation of welfare benefits to increase efficiency and reduce unit costs.
Key Data
$500 million
— Annual illusory labor savings that were removed from the Preliminary Budget for Fiscal Year 2023.
7,000
— Number of vacant full-time positions eliminated in the Preliminary Budget for Fiscal Year 2023.
26,000
— Number of vacant full-time positions that existed on December 31, 2021.
New York City's preliminary budget for fiscal year 2023 includes important initial steps toward fiscal efficiency, such as reducing vacant positions and removing specious labor savings. However, the administration must prioritize working with municipal unions during collective bargaining negotiations to identify efficiency savings and rationalize benefit levels to ensure long-term fiscal stability.
Recommendations related to Collective Bargaining
The Administration should work with its municipal unions to identify and implement efficiency savings and rationalize benefit levels and administration during collective bargaining negotiations.
Municipal labor contracts for over 100 units are expiring, and any future raises must be fully funded through new resources or efficiency savings rather than relying on illusory budget placeholders. Annual raises of two percent over three years would cost $1 billion in fiscal year 2023, rising to $2.5 billion by fiscal year 2025.
Recommendations related to Collective Bargaining
The City should either remove the unspecified labor savings from the financial plan or identify specific actions to achieve them.
Any future collective bargaining increases would need to be fully funded with new resources or by implementing efficiencies that offset the costs.
Agencies should work with labor to change work rules to increase efficiency, streamline work processes, and consolidate like functions across agencies.
Key Data
$1 billion
— Cost of annual raises of two percent over three years in fiscal year 2023.
$2.5 billion
— Cost of annual raises of two percent over three years in fiscal year 2025.
$500 million
— Unspecified labor savings included in the November 2021 Financial Plan.
$200 million
— Attrition savings included in the November 2021 Financial Plan.
New York City spends $53.6 billion on wages and benefits, yet could achieve significant savings by modernizing labor contracts and employee benefits. Renegotiating collective bargaining agreements to include productivity targets, premium cost-sharing, and updated work rules offers a path to fiscal stability without reducing services.
Recommendations related to Collective Bargaining
In negotiating the next round of contracts, the administration and unions should modernize employee benefits, eliminate outdated salary differentials, and change contractual work rules that impede efficient service delivery.
The city and unions should modify some of the Citywide Agreement provisions for work hours, vacation and sick leave, overtime, and other benefits common across nonuniformed collective bargaining units.
The next round of collective bargaining should set a productivity savings target for all bargaining units.
A thorough review of collective bargaining agreements should increase job assignment flexibility, extend the workweek to 40 hours for all employees, and alter vacation and sick leave accrual policies.
The city should consolidate the roughly 75 separate union welfare funds to achieve administrative efficiencies and greater purchasing power.
The Absent Teacher Reserve should be time-limited to provide employees an appropriate opportunity and incentive to find new positions within the department.
Key Data
$53.6 billion
— Amount of the city’s budget that funds wages, health insurance, pensions, and other fringe benefits.
95%
— Percentage of city employees who elect health insurance plans with no premium contributions.
$675 million
— Potential annual savings if city employees shared premium costs slightly below the level of state employees.
$160 million
— Potential annual savings from consolidating the roughly 75 separate union welfare funds.
$120 million
— Potential annual savings from lengthening sanitation routes, which requires union negotiation.
$136 million
— Cost of the Absent Teacher Reserve, which keeps Department of Education employees on the payroll after their positions are eliminated.
2026 is the year the MTA will likely have spent all of its one-time COVID-19 federal aid, and when the MTA will have to address the estimated $2.5 billion annual structural operating deficit which that aid is now covering. At an event with CBC Trustees, MTA Chair and CEO Janno…
The current financial plan fails to allocate funds for upcoming raises for city employees, with 2 percent annual increases requiring $540 million this year and rising to $2.2 billion by fiscal year 2025. To address this, the incoming administration should collaborate with municipal unions during collective bargaining to implement productivity improvements that can fund raises and help close budget gaps.
Recommendations related to Collective Bargaining
Mayor-elect Adams should be working with the municipal unions to leverage the next round of collective bargaining agreements to make changes allowing the City to be more productive, use those savings to fund raises, close budget gaps, and help City employment be more supportive to skill building and career enhancement.
The City should ensure that this next collective bargaining round is a City saver and not a budget buster.
Key Data
$540 million
— Cost of 2 percent annual raises for City employees this year.
$1.2 billion
— Cost of 2 percent annual raises for City employees in fiscal year 2023.
$2.2 billion
— Cost of 2 percent annual raises for City employees by fiscal year 2025.
The upcoming round of collective bargaining agreements presents a critical opportunity for the administration and municipal unions to collaborate on finding efficiencies that close budget gaps while funding workforce raises. By avoiding the alternatives of stagnant wages or service-cutting raises, the city can simultaneously improve fiscal stability and enhance city employment as a path for career advancement.
Recommendations related to Collective Bargaining
The administration and labor should collaborate to find efficiencies to help close budget gaps and fund workforce raises.
The administration should make city employment an enticing road to career advancement and skills growth in addition to being a stable job.
The administration and municipal unions should prioritize collaboration to modernize operations and identify budget savings during the next round of collective bargaining.
The incoming administration should pursue a collaborative relationship with municipal labor unions to modernize work rules and ensure that future raises are funded through productivity gains rather than increased expenditures. Negotiating changes to health and welfare benefit costs is also essential to bring these expenses to sustainable levels and reduce long-term fiscal liabilities.
Recommendations related to Collective Bargaining
The City should negotiate changes with municipal labor unions to bring health and welfare benefit costs to sustainable levels.
The Administration should pursue a collaborative relationship with labor that recognizes the shared interest in a thriving city and sustainable, effective, and efficient municipal government, including gainsharing fiscal benefits to fund raises.
City managers and labor should identify and work to change work rules in collective bargaining agreements that date back decades and limit the City’s ability to operate efficiently.
Raises for City workers should be funded through savings from productivity gains rather than increasing City expenditures.
The City should consolidate the more than 100 separate welfare funds managed by various unions to provide comparable or better benefits at lower costs through administrative economies of scale.
Key Data
$7.2 billion
— The City’s annual costs for employee and retiree health benefits, which have grown an average of 4.2 percent per year since fiscal year 2014.
$122 billion
— The City's long-term fiscal liability for other postemployment benefits (OPEB), which is driven in part by generous retiree health benefits.
100
— The number of separate welfare funds managed by various unions that provide benefits to most employees and retirees.
4.2 percent
— The average annual growth rate of the City's health and welfare benefit costs since fiscal year 2014.
New York State should veto 21 bills that enhance public employee pension and disability benefits, as these measures bypass established budget negotiations and collective bargaining processes. These legislative actions would impose significant immediate and long-term costs on the state and local governments without providing additional services.
Recommendations related to Collective Bargaining
The Governor should veto the 21 bills that enhance pension or disability benefits, as they bypass budget negotiations and collective bargaining processes.
The Governor should veto S3537/A4077, which would add four transit authorities to binding arbitration provisions.
The Governor should veto S4897/A4060, which would authorize the Triborough Bridge and Tunnel Authority employee organization to opt into binding arbitration.
Key Data
$64.1 million
— Immediate cost of the 15 bills with fiscal notes attached.
$7.8 million
— Annual cost of the 15 bills with fiscal notes attached.
$48.2 million
— First-year cost of S4523/A6457, which establishes a 20-year retirement plan for certain State law enforcement positions.
$9.5 million
— First-year cost of S6690/A7464, which requires New York City paraprofessionals to join the Teachers Retirement System.
$1,270,000
— One-time past service cost of S6710/A7342, which expands eligibility for performance of duty disability benefits.
The Metropolitan Transportation Authority faces a $2.7 billion annual structural deficit that requires significant operational reforms, including labor collaboration to adjust work rules and reduce headcount. To achieve long-term fiscal stability, the agency must implement productivity improvements and cost-saving measures, such as aligning health care premium sharing with other state employees, while managing workforce reductions through attrition and retraining.
Recommendations related to Collective Bargaining
The MTA and labor leaders should collaborate on strategies, including retraining, redeployment, and gainsharing, to manage workforce reductions.
The MTA should pursue work rule changes through labor collaboration to improve productivity and reduce the number of employees.
The MTA should align employee and retiree health care premium sharing to match that of other New York State employees.
Key Data
$663 million
— Potential annual savings from reducing employee and retiree health care spending.
12,838
— Total headcount impact of the proposed operational and labor-related reforms.
$2.9 billion
— Total annual savings the agency could realize by 2024 through operational and labor reforms.
The city faces significant budget gaps of approximately $5 billion annually through fiscal year 2025, which are obscured by unrealistic expectations of labor savings. Future administrations must navigate these financial shortfalls while negotiating new labor contracts without exacerbating fiscal instability.
Recommendations related to Collective Bargaining
The next Administration must negotiate the next round of collective bargaining agreements without creating greater fiscal stress.
The City should eliminate the use of $1 billion in annual unspecified labor savings as a budgetary ruse to understate the magnitude of the City’s gaps.
Key Data
$5 billion
— Annual budget gaps projected for fiscal year 2023 to fiscal year 2025.
$1 billion
— Annual unspecified labor savings included in the budget, which are used to understate the magnitude of the City’s gaps.
$2.1 billion
— Amount by which fiscal year 2021 tax revenues exceeded previous expectations.
$15 billion
— Additional federal aid received by the City.
$500 million
— Deposit made into the Rainy Day Fund.
$4.0 billion
— Cumulative fiscal year 2021 and 2022 savings reported in the Adopted Budget.
The NYPD budget currently excludes funding for expired and future collective bargaining agreements, meaning expenditures will likely increase once new contracts are ratified. Furthermore, the city's labor reserves only contain funding for a one percent raise, necessitating additional budget allocations if future agreements exceed this level.
Recommendations related to Collective Bargaining
The City must exercise diligent management of overtime to achieve the budgeted levels for fiscal year 2022.
The City must adjust the NYPD budget to reflect the true cost of collective bargaining agreements once they are settled.
The City must ensure that additional resources are added to the budgets of the NYPD and other agencies if collective bargaining raises exceed the current one percent funding level.
Key Data
$350 million
— Cumulative value of the current pattern of raises through fiscal year 2021 for the Police Benevolent Association (PBA) alone.
1 percent
— Funding level contained in the City’s labor reserves for the next round of collective bargaining agreements.
2 percent
— Hypothetical annual raise for NYPD officers used to estimate future budget impacts.
$150 million
— Estimated cost of 2 percent annual raises for the NYPD in the first year.
$450 million
— Estimated cost of 2 percent annual raises for the NYPD by the third year.
New York City faces significant fiscal pressure as collective bargaining agreements with municipal unions expire, requiring the next administration to secure concessions or identify new revenue sources to avoid increasing budget gaps. Successfully negotiating work rule changes and rationalizing employee benefits offers a path to achieving over $1 billion in annual recurring savings.
Recommendations related to Collective Bargaining
The Mayor that negotiates these contracts must secure agreement to no raises in the first two years, secure concessions to pay for raises, find additional revenues to pay for any collective bargaining increases, or the budget gaps will be increased.
The City should negotiate work rule changes with the City’s municipal unions and rationalize employee benefits to yield substantial recurring savings exceeding $1 billion per year.
Key Data
$1 billion
— The amount of recurring annual savings that could be achieved by successfully negotiating work rule changes and rationalizing employee benefits.
33,000
— The number of employees represented by the Police Benevolent Association and the Uniformed Firefighters Association for whom the City budget currently includes funding for pattern wages.
1 percent
— The amount of raises in the first two years of the next round of collective bargaining that the Mayor eliminated funding for.
Managing the City’s fiscal crisis well will be a critically important duty of the next Mayor and a primary determinant of how the city survives the current crisis, and ultimately thrives in the future. Managing NYC’s Fiscal Crisis: A CBC Mayoral Candidate Forum featured a 10-minute conversation with each candidate,…
The City's Adopted Budget pledged to achieve $1 billion in annual, recurring labor savings starting in fiscal year 2021, yet no contract modifications have been announced to realize these goals. Instead, the City and some municipal unions agreed to defer $633 million in expenses to future years, increasing the required savings targets for 2022 and beyond.
Recommendations related to Collective Bargaining
The City should pursue contract modifications to increase operational efficiency, reform benefits, or make other changes that could generate recurring labor savings.
The City should remove savings in future years from the financial plan that are not based on a feasible plan.
The City should ensure that overtime spending reductions are achieved through contractual or staffing reforms rather than just projections.
Key Data
$1 billion
— The amount of annual, recurring labor savings the Adopted Budget pledged to achieve starting in fiscal year 2021.
$633 million
— The amount of expenses the City and some municipal unions agreed to shift from fiscal year 2021 to fiscal year 2022.
$1.6 billion
— The amount the needed fiscal year 2022 savings rose to after the shift of expenses.
$1 billion
— The amount of savings expected in fiscal years 2023 and 2024.
New York City's fiscal year 2021 budget reflects significant shifts in agency spending, with a $266 million increase in the subsidy for Health and Hospitals driven by recent collective bargaining agreements. While many agencies face budget cuts, the city must identify further savings to address a $4.2 billion gap projected for fiscal year 2022.
Key Data
$266 million
— The projected increase in the City's subsidy to New York City Health and Hospitals (H+H) due to collective bargaining agreements executed with the staff.
New York City faces a significant fiscal crisis requiring immediate management actions, such as increasing agency efficiency and utilizing attrition to reduce the workforce, rather than relying on borrowing or layoffs. Reinvigorating labor-management committees to address health insurance premiums could generate substantial savings without resorting to austerity measures.
Recommendations related to Collective Bargaining
Reinvigorate the successful labor-management committee the administration established in 2014 to reduce health insurance spending.
Identify and implement the $1 billion of labor savings committed to in the budget.
Key Data
$1 billion
— Labor savings committed to in the budget that have not yet been identified.
22,000
— Workers the city would have to lay off if the Legislature does not authorize borrowing.
7,000
— Employees per year that could be reduced through a stricter hiring freeze.
14,000
— Additional workers the city has compared to the highest point before the last recession.
$2 billion
— Amount by which the current city budget, adjusted for inflation, is higher than what the city spent in 2018.
New York City faces a significant fiscal crisis requiring $1 billion in recurring labor savings, which can be achieved through renegotiating health insurance, welfare funds, and work rules within collective bargaining agreements. These reforms would allow the city to avoid layoffs while maintaining competitive compensation packages for municipal employees.
Recommendations related to Collective Bargaining
Reforms to health insurance provide the best path to meet the target.
The City should work with the MLC to consolidate welfare funds to leverage economies of scale for prescription drugs and other medical benefits.
City contributions to union annuity funds are negotiated with each union, and should be reduced or eliminated.
The City should seek State legislation to eliminate the Variable Supplement Funds and have the assets transferred to the main pension funds.
The guaranteed return on the fixed return fund should be sharply reduced through State legislation.
The City could reduce overtime for skilled trades and uniformed employees through the implementation of overtime caps.
Greater flexibility to assign employees, and to ask employees to perform duties out of their job description for a temporary assignment in response to a specific need, would facilitate the most effective use of the City’s workforce.
The City could make four firefighters the standard staffing for engine companies.
The City should be given the flexibility to shift at least half of the ALS ambulances to a one paramedic, one EMT staffing model.
Key Data
$1 billion
— Recurring savings target from negotiations with labor unions.
$1.1 billion
— Total savings in fiscal year 2021.
$1.8 billion
— Total savings in fiscal year 2024.
$1.2 billion
— Estimated annual value of the taxpayer-provided TDA guarantee.
$1.3 billion
— Projected City payments to welfare funds in fiscal year 2020.
$50.2 billion
— Projected personnel costs in fiscal year 2021.
New York City faces a $1 billion recurring savings target from labor negotiations to avoid layoffs during the current fiscal crisis. Achieving these savings requires structural reforms to employee benefits, such as health insurance premium sharing and welfare fund consolidation, alongside productivity improvements like overtime caps and modified staffing models.
Recommendations related to Collective Bargaining
The City should work with the MLC to consolidate welfare funds to leverage economies of scale for prescription drugs and other medical benefits.
The City should seek State legislation to eliminate the VSFs and have the assets transferred to the main pension funds.
The guaranteed return on the fixed return fund should be sharply reduced through State legislation.
The City could reduce overtime for skilled trades and uniformed employees through the implementation of overtime caps.
Greater flexibility to assign employees, and to ask employees to perform duties out of their job description for a temporary assignment in response to a specific need, would facilitate the most effective use of the City’s workforce.
The City could make four firefighters the standard staffing for engine companies.
The City should be given the flexibility to shift at least half of the ALS ambulances to a one paramedic, one EMT staffing model.
The pay scale for workers should be revised to establish new productivity targets and compensation structures that would improve collection operations while maintaining some of the workers’ currently enhanced earnings.
City contributions to annuity funds are negotiated with each union, and should be reduced or eliminated.
Reforms to health insurance provide the best path to meet the target.
Key Data
$1 Billion
— Recurring savings target from negotiations with labor unions.
$1.1 Billion
— Uniformed-agency overtime budget in fiscal year 2019.
$1.2 Billion
— Estimated annual value of the taxpayer-provided guarantee for the tax-deferred annuity fund.
$1.3 Billion
— Projected city payments to welfare funds in fiscal year 2020.
$1.5 Billion
— Transfers from pension funds to Variable Supplement Funds in fiscal year 2018.
$1.8 Billion
— Total labor savings in fiscal year 2024.
Watch the original segment here . Budget watchdogs say labor and City Hall should target health care costs first. "The city pays the full premium for employees, retirees and their families. It's a deal that no other New Yorker in the private sector has," said Maria Doulis, vice-president at the…
New York City's fiscal year 2021 budget relies on $1 billion in labor savings to be negotiated with municipal unions, yet no concrete plan exists to achieve these targets. Without these negotiated savings, the city faces the potential layoff of 22,000 workers, highlighting the urgent need for structural changes to collectively bargained benefits and workforce management.
Recommendations related to Collective Bargaining
The City should implement a package that consolidates union welfare funds, phases in employee health insurance premium contributions, and changes work rules to improve productivity.
The City and labor unions should identify savings by agreeing to change other collectively bargained benefits, including vacation days, sick leave, work hours, and contractually agreed upon raises and steps.
The City should reduce the workforce through attrition, which is both possible and preferable to layoffs.
The City should broaden the existing partial hiring freeze by filling only a portion of the positions vacated by the 20,000 individuals who leave City employment each year.
The City should undertake a thorough review of agency programs and operations to identify recurring savings and implement recurring labor savings.
Key Data
$1 Billion
— Recurring savings target to be negotiated with the City’s municipal labor unions.
22,000
— Number of municipal workers the City would lay off beginning in October absent a labor savings agreement.
$53 Million
— Labor reserve savings in fiscal year 2021 resulting from the elimination of funding for two 1 percent raises.
$805 Million
— Labor reserve savings in fiscal year 2024 resulting from the elimination of funding for two 1 percent raises.
6 percent to 7 percent
— Portion of City employees who leave City employment each year.
20,000
— Number of individuals who leave City employment each year.
The Metropolitan Transportation Authority faces a severe fiscal crisis, necessitating a strategy that prioritizes operational efficiencies, including renegotiating union agreements to address work rules and compensation. To ensure financial stability, the authority must pursue savings through labor negotiations and structural changes while balancing service levels and capital project priorities.
Recommendations related to Collective Bargaining
A new financial plan should restart the Transformation Plan and should include additional efficiencies from operational changes, most of which require changes in union agreements about work rules and compensation.
Workers and their union representatives should collaborate in revising work practices so that the MTA’s financial survival, and their job security, is protected well into the future.
The new financial plan should set a substantial target for savings from negotiations with the major unions.
The current collective bargaining agreement with the Transport Workers Union Local 100 has provision for joint labor-management committees to explore efficiencies in some departments; even better structured and targeted arrangements should be developed for mass transit operations and be extended to the commuter railroads.
Key Data
$500 million
— Annual savings sought by the Transformation Plan, largely from reorganization, administrative efficiencies, and better management of staff levels and overtime.
$8.4 billion and $12.6 billion
— Estimated operating shortfall for the 2020 and 2021 period, highlighting the fiscal crisis necessitating labor negotiations.
$700 to $800 million
— Estimated annual cost for COVID-19 related cleaning, testing, and personal protective equipment in 2020 and 2021, which contributes to rising operating expenses.
New York City's fiscal year 2021 budget relies on achieving $1 billion in recurring savings through negotiations with municipal labor unions to avoid the potential layoff of 22,000 employees. Additionally, the budget assumes the successful implementation of agency savings programs, including a $350 million reduction in police department overtime.
Recommendations related to Collective Bargaining
The City must successfully negotiate $1 billion in recurring savings with municipal labor unions to maintain current spending levels.
To avoid layoffs, the City should pursue attrition, increased productivity, and negotiated fringe benefit changes as methods to achieve necessary budget savings.
Key Data
$1 billion
— Recurring savings the City must negotiate with municipal labor unions.
22,000
— Number of employees facing potential layoffs if savings targets are not met.
$350 million
— Reduction in overtime at the New York City Police Department approved as part of agency savings programs.
$88.2 billion
— Total budget adopted by New York City leaders for fiscal year 2021.
$98.5 billion
— Size of the total budget in fiscal year 2020.
$92.8 billion
— Size of the total budget in fiscal year 2021.
Recent labor settlements and collective bargaining agreements have significantly increased operating costs, with $102 million in City subsidies recently allocated to cover these labor expenses. These agreements, while providing necessary staffing changes, have set expensive precedents for work rules and scheduling that threaten the agency's long-term fiscal stability and ability to implement its turnaround plan.
Recommendations related to Collective Bargaining
NYCHA’s fiscal stability depends on future collective bargaining settlements being financially sustainable and providing enough flexibility for NYCHA to implement its turnaround plan.
The City should ensure that future labor contracts do not set a precedent that makes it very expensive to modernize the management structure and operations.
NYCHA must ensure that future settlements provide enough flexibility for the agency to implement its turnaround plan.
Key Data
$102 million
— The amount of City-funded subsidies used to cover the cost of recent labor settlements with the workforce.
$59 million
— The total net cost of the 2018-2021 contract with Teamsters Local 237, which represents Caretakers and Heating Plant Technicians.
$83 million
— The gross cost of the Teamsters Local 237 contract, which the City expects to be offset by $24 million in health care savings.
$34 million
— The estimated net cost of the maintenance workers’ contract through January 2022.
The new labor contract for the Metropolitan Transportation Authority's largest union increases compensation by 9.8 percent, adding $16.5 million to the agency's four-year budget gap. While the agreement includes some savings initiatives, the agency failed to secure workrule changes and faces financial risks if these projected savings do not materialize.
Recommendations related to Collective Bargaining
To keep the financial plan impact neutral, the agreements should include greater savings, including workrule changes, to offset the impact of these increased costs.
The labor-management productivity committees established in the TWU contract should establish productivity targets and provide public quarterly reports on savings to ensure accountability.
The MTA should not miss the opportunity to include workrule changes in other collective bargaining agreements.
Similar committees should be established with other unions if workrule changes are not directly negotiated in the other collective bargaining agreements.
Key Data
$1 billion
— Cost of the compounded 9.8 percent wage increases through 2023.
$16.5 million
— Net costs of the agreement added to the MTA's four-year budget gaps.
$64 million
— Cost of the agreement's non-wage benefits over four years.
$11.7 million
— Additional cost if the MTA negotiates similar agreements with other bargaining units.
$44 million
— Annual savings the MTA estimates from health and worker availability provisions.
New York City's budget grew from $72.8 billion in fiscal year 2014 to $92.0 billion in fiscal year 2019, driven by policy choices like collective bargaining agreements and program expansions. This spending growth, which averaged 4.8 percent annually, limits the city's ability to set aside resources for potential economic downturns.
Recommendations related to Collective Bargaining
The City should prioritize spending restraint in the upcoming budget season to set aside additional resources to weather an economic downturn.
Managing the factors that have led to rapid spending growth, such as the rising cost of contracts, overtime, or headcount growth, could help reduce the City’s need to take drastic actions when the inevitable downturn occurs.
Key Data
$72.8 billion
— NYC budget in fiscal year 2014.
$92.0 billion
— NYC budget in fiscal year 2019.
$4.8 billion
— Increase in full-time salaries and wages from fiscal year 2014 to fiscal year 2019.
11 percent
— Expansion of the full-time municipal workforce from 271,767 to 300,442.
$1.8 billion
— Overtime spending in fiscal year 2019.
4.8 percent
— Average annual rate of budget growth between fiscal years 2014 and 2019.
Proposed legislation A7749/S6208 would mandate employee protection provisions in school bus contracts, restricting the city's ability to negotiate terms and potentially locking in high expenses. Maintaining procurement flexibility is essential to controlling the $1.4 billion annual cost of pupil transportation and securing savings for taxpayers.
Recommendations related to Collective Bargaining
The Governor should veto A7749/S6208, which would impose costly restrictions on school bus contracts by codifying contract components that the courts struck down.
The City must maintain flexibility to procure and negotiate pupil transportation contracts to secure savings for future taxpayers.
The state should reject this costly and ill-advised bill that mandates employee protection provisions.
Key Data
$1.4 billion
— Annual cost of New York City pupil transportation.
The Metropolitan Transportation Authority faces a cumulative cash shortfall of $637 million by 2023, a projection contingent on optimistic assumptions including a labor settlement with 2 percent annual raises. To address this, the agency must negotiate a labor agreement focused on productivity gains and benefit cost offsets to ensure a net-zero impact on its bottom line, as labor costs currently account for three-fifths of operating expenses.
Recommendations related to Collective Bargaining
It is critical that the MTA negotiate a labor settlement focused on increased productivity with the TWU, since labor costs represent three-fifths of operating costs.
Any raises negotiated in the settlement should be offset by savings from productivity gains and in health and welfare benefit costs so that there is a 'net zero' impact on the MTA's bottom line.
Key Data
$637 million
— Cumulative cash shortfall projected for the MTA by 2023.
$740 million
— July forecast for the MTA's cumulative cash shortfall.
2 percent
— Annual raises assumed in the MTA's labor settlement projections.
three-fifths
— Portion of the MTA's operating costs represented by labor costs.
$361 million
— Expected savings from renegotiating paratransit agreements with New York City.
$451 million
— Reduction in projected savings for the Budget Reduction and Transformation Plans.
The New York State Legislature has passed 18 bills that would expand pension and disability benefits for public employees, which would cost at least $71 million in the first year and undermine previous fiscal reforms. These legislative actions bypass standard negotiation processes and threaten to increase long-term personnel costs by granting targeted benefit enhancements without corresponding service improvements.
Recommendations related to Collective Bargaining
The Governor should veto all 18 bills that would enhance pension or disability benefits without providing enhanced services or offsetting savings.
The Governor should veto A7620-A/S5903-A, which would cost $5.6 million annually to allow New York City police officers to receive retirement credit for time spent as cadets.
The Governor should reject the expansion of employee and retiree benefits to maintain the integrity of hard-fought pension and health insurance reforms.
Key Data
$71 million
— Projected first-year cost of the 18 benefit sweetener bills.
$5.6 million
— Annual cost to allow New York City police officers to receive retirement credit for time spent as cadets.
$41 million
— First-year cost of establishing a 20-year retirement plan for certain state law enforcement positions.
$15.7 million
— First-year cost of requiring New York City paraprofessionals to join the Teachers Retirement System.
$2.1 million
— First-year cost of granting ambulance medical technician supervisors, coordinators, and technicians an enhanced disability benefit.
$1.5 million
— First-year cost of allowing sheriffs, undersheriffs, deputy sheriffs, and correction officers to be eligible for performance of duty disability benefits.
In fiscal year 2019, the average pay for full-time city employees reached $85,636, with Department of Education staff seeing annual pay increases exceeding 5% due to retroactive pay from collective bargaining agreements. While uniformed overtime pay declined for some titles, total uniformed overtime still reached $1.1 billion in fiscal year 2019, accounting for approximately two-thirds of the city's total overtime budget.
Key Data
$1.1 billion
— Total uniformed overtime pay in fiscal year 2019, which comprises approximately two-thirds of total overtime expenses in the City budget.
$85,636
— Average pay for full-time city employees in fiscal year 2019, an increase of $13,617 over five years.
5%
— Annual rate of average pay increase for the five most common Department of Education positions, partly due to retroactive pay included in collective bargaining agreements.
NYCHA's efforts to improve property management and address its massive repair backlog are hindered by outdated work rules and labor costs, necessitating comprehensive collective bargaining reforms. While some progress has been made with caretakers, the housing authority must modernize schedules for skilled trades to effectively reduce overtime and clear the growing volume of open work orders.
Recommendations related to Collective Bargaining
Achieving efficient and effective property management requires collective bargaining reforms.
NYCHA must expand alternative work schedules to other bargaining units beyond the caretakers and heating plant technicians.
NYCHA must modernize work rules and schedules for skilled trades to address the work order backlog and reduce overtime spending.
NYCHA cannot achieve necessary management changes without the cooperation of labor, state and local lawmakers, and federal officials.
Key Data
$101 million
— The amount included in the City's Adopted Budget for Fiscal Year 2020 for collective bargaining-related costs for NYCHA.
24 percent
— The increase in open work orders between the release of NYCHA 2.0 in December 2018 and July 31, 2019.
71 days to 112 days
— The increase in the average time to complete repairs at NYCHA properties.
$1,500
— The one-time bonus provided to caretakers for signing up for an alternative work schedule.
CBC Vice President Maria Doulis says MTA managers, riders, and drivers will all be making sacrifices through job cuts, fare hikes, and congestion pricing, so it’s only fair labor contributes as well: “The MTA’s demands reflect the fact that more needs to be done with the workforce in order to…
The Metropolitan Transportation Authority faces significant financial instability, with projected cumulative deficits exceeding $700 million by 2023, exacerbated by optimistic savings assumptions and potential wage growth. To stabilize finances, the Authority must pursue zero-cost collective bargaining agreements that include productivity improvements and health insurance contribution equalization.
Recommendations related to Collective Bargaining
MTA leaders should prioritize seeking zero-cost wage settlements in current collective bargaining.
The MTA should equalize represented MTA workers’ health insurance contributions with the levels paid by nonrepresented MTA workers and other state employees.
The MTA should increase productivity to offset the cost of 2 percent raises.
Key Data
$180 million
— Projected savings in 2020 from net-zero wage increases, productivity gains, and health insurance equalization.
$288 million
— Projected savings in 2021 from net-zero wage increases, productivity gains, and health insurance equalization.
$396 million
— Projected savings in 2022 from net-zero wage increases, productivity gains, and health insurance equalization.
2 percent
— Annual salary increases assumed in the MTA's financial plan.
2.5 percent
— Raise percentage included in the most recent TWU contract.
$500
— Bonus amount included in the most recent TWU contract.
The New York City executive budget proposal falls short of necessary reserves, and additional savings could be achieved by centralizing procurement and consolidating union welfare funds to save $160 million. These measures, which would require collective bargaining, are preferable to cutting public services.
The Metropolitan Transportation Authority faces a dire fiscal outlook with projected annual cash deficits reaching $976 million by 2022 and a cumulative cash shortfall of nearly $2.3 billion. To address this, collective bargaining agreements should prioritize self-funded raises, productivity improvements, and increased employee contributions to health insurance to help stabilize the authority's finances.
Recommendations related to Collective Bargaining
The MTA should revise the assumption that all represented workers will receive 2 percent wage increases annually, and instead ensure that any pay increases are conditioned on generating offsetting savings.
MTA management and labor should set productivity goals and collaboratively develop an agenda of collective bargaining changes that would allow both sides to achieve these goals.
The MTA should increase employee health care contributions of represented workers to levels similar to the nonrepresented workforce to defray a significant share of the authority’s health and welfare expense.
New collective bargaining agreements should eliminate the restrictions on hiring more part-time bus operators and the restrictions on express bus scheduling to allow the authority to orient service toward peak periods.
Management should be allowed to schedule split runs for subway train operators and conductors to allow for more efficient scheduling of those workers.
The MTA should adopt an approach to collective bargaining that freezes total labor costs over the life of the financial plan to place the authority on solid financial ground.
Key Data
$976 million
— Projected annual cash deficit for the MTA in 2022.
$2.3 billion
— Cumulative cash shortfall projected for the MTA in 2022.
$72 million
— Estimated savings in 2019 from agreements that condition pay increases on offsetting savings.
$400 million
— Estimated savings by 2022 from agreements that condition pay increases on offsetting savings.
$950 million
— Potential savings over the life of the financial plan from forgoing raises.
$496 million
— Potential annual savings from increasing subway maintenance productivity to the median for selected U.S. systems.
The City's new health care savings agreement with the Municipal Labor Committee sets a $1.1 billion target, which is significantly lower than the previous agreement's $3.4 billion target despite rising health insurance costs. This agreement relies on improper accounting and fails to address structural issues like the inefficient provision of benefits through welfare funds and the lack of retiree contributions to health care costs.
Recommendations related to Collective Bargaining
The City should have maintained the target savings at the 2018 level to stimulate greater cooperation and movement on reforms.
Any recurrent savings from the prior agreement should have been returned to the general fund rather than attributed to new targets.
Savings against high projections should be used for general operating needs rather than claimed as savings against labor costs.
The City and the Municipal Labor Committee must address the fragmented and inefficient provision of prescription drug, vision, and dental care via welfare funds.
The City and the Municipal Labor Committee should reform the antiquated and wasteful Health Insurance Stabilization Fund.
The City and the Municipal Labor Committee must address the costly provision of health insurance to retirees with no contribution to the cost of care.
Key Data
$8.1 billion
— Total health benefit expenditures in fiscal year 2019.
$3.4 billion
— Health insurance savings target set by the previous agreement spanning fiscal years 2015 to 2018.
$1.9 billion
— Health savings claimed from the previous agreement due to the decision to credit savings from lower than projected growth in health insurance premiums.
$1.1 billion
— Total savings target for the new agreement spanning fiscal years 2019 to 2021.
$658 million
— Projected savings from limiting increases in the HIP rate to 3.5 percent and 3 percent in fiscal years 2020 and 2021.
$211 million
— Estimated annual savings from the prior agreement that are being attributed to the new targets.
7.42% is the compounded salary and wage increases for members of DC37, the City’s largest municipal union for civilian workers, under a new contract that sets the pattern for negotiations with other labor unions. NYC Labor Commissioner Bob Linn joins the podcast to discuss this deal, the dynamics of negotiating…
New York City's uniformed agencies, particularly the Fire Department and Department of Correction, continue to struggle with high overtime costs despite the implementation of spending caps. Addressing these expenses requires negotiating changes to work rules and sick leave policies, as simply increasing staffing levels has proven insufficient to curb excessive overtime.
Recommendations related to Collective Bargaining
The City must couple uniformed overtime caps with workforce and work rule changes negotiated with municipal unions.
The City should tackle high absenteeism rates with a comprehensive strategy and changes to the sick leave policy, which currently grants unlimited sick time to uniformed employees.
Management and labor must negotiate work rule changes in the next round of labor contracts to address the root causes of excessive overtime.
Key Data
$1.2 billion
— Uniformed employees earned $1.2 billion in overtime in fiscal year 2016.
53 percent
— 53 percent of the uniformed workforce earned overtime pay in excess of 20 percent of base salary in fiscal year 2016.
$272 million
— Uniformed overtime at the FDNY in fiscal year 2017 was $272 million.
$240 million
— DOC uniformed overtime was $240 million in fiscal year 2017.
7.5 percent
— Exceeding a monthly absence rate of 7.5 percent at the FDNY triggers a contractual reduction in staffing at 10 engine companies.
New York City's four Project Labor Agreements, which cover billions in construction work, have not been evaluated for their promised savings or effectiveness. With the Capital Commitment Plan reaching $82 billion, the City must conduct independent analyses of these agreements to determine if they should be renewed or amended.
Recommendations related to Collective Bargaining
The City should commission evaluations of the four expiring PLAs while there is still time to decide if it is in the City’s interest to amend or renew them.
It is important that these decisions be made with transparency and be based on a detailed, independent analysis of performance and experience.
The Mayor’s Office of Contract Services should also identify and evaluate other City efforts to boost construction productivity.
Key Data
$347 million
— Projected savings on construction work from the four Project Labor Agreements.
$8 billion
— Total value of construction work covered by the projected savings of the Project Labor Agreements.
$82 billion
— Total value of the City's current Capital Commitment Plan.
4 to 5 percent
— Average annual rate of construction inflation since the City signed the four Project Labor Agreements.
The New York City Housing Authority faces a $32 billion capital shortfall and significant operational inefficiencies that threaten the long-term viability of its housing stock. To address these challenges, the authority must modernize its collective bargaining agreements, decentralize property management, and leverage underutilized land assets to generate revenue for necessary repairs.
Recommendations related to Collective Bargaining
NYCHA should decentralize property management, modernize its collective bargaining agreements and staffing structures, increase the use of private maintenance contracts, and work with the City and State to use more flexible procurement arrangements.
Key Data
39%
— NYCHA's costs of operations are 39% higher than those of other landlords operating rent-stabilized buildings, a disparity driven by factors including inflexible <b>collective bargaining agreements</b>.
New York City's fiscal year 2019 budget faces significant pressure from rising operating costs and a ballooning capital plan, necessitating strict fiscal discipline during upcoming municipal labor negotiations. To maintain financial stability, the City must limit wage increases to 1 percent unless offset by productivity gains, secure health care savings, and halt the expansion of the municipal workforce.
Recommendations related to Collective Bargaining
In negotiating new collective bargaining agreements, the City should hold firm that raises in excess of the 1 percent per year the City has set aside must be funded through concessions or productivity increases.
In negotiating new collective bargaining agreements, the City should hold firm that substantial health care savings must be secured.
The City should develop a policy to increase the size of the Retiree Health Benefit Trust (RHBT) to help reduce its other postemployment benefits (OPEB) liability.
The City must halt the growth of the workforce, which has already grown by more than 33,000 positions and is projected to expand by an additional 7,000 employees.
Agencies should be required to find recurring efficiency savings equal to 1 percent of their City-funded spending and to fund new initiatives with commensurate savings in other program areas.
Key Data
1 percent
— The annual raise amount the City has set aside for municipal unions.
33,000
— The number of positions the City workforce has already grown by.
7,000
— The number of additional employees the City workforce is projected to expand by.
1 percent
— The amount of recurring efficiency savings agencies should be required to find.
$93 billion
— The City's liability for providing health insurance to its retirees.
The Absent Teacher Reserve, a pool of teachers without permanent assignments who continue to receive full pay, has grown in both size and cost, reaching $136 million in the 2018 school year. To address this, the City should utilize upcoming labor negotiations to reform or eliminate the program, specifically by capping the time teachers can remain in the pool at six months.
Recommendations related to Collective Bargaining
The City should pursue reforms to the ATR, such as a six-month time limit, in upcoming labor negotiations with the UFT.
The City should use this round of negotiations to constrain, or preferably eliminate, the ATR.
Time in the ATR should be capped at six months.
Key Data
$136 million
— Cost of the Absent Teacher Reserve in the 2018 school year.
$74 million
— Cost of the Absent Teacher Reserve at the start of the 2008 school year.
$8.5 million
— Cost of the 2018 separation incentive initiative.
$23 million
— Annual savings from the 2018 separation incentive.
$7 million
— Annual savings generated by fiscal year 2020 from placing ATR teachers in schools with vacancies.
$1.8 million
— Cost of the 2014 separation incentive payout.
New York City's sanitation department faces significant inefficiencies in waste collection, where refuse collection is 71 percent more productive than recycling collection. To address these fiscal challenges, the city should leverage upcoming labor contract negotiations to increase flexibility, end specific bonuses, and meet established productivity targets to generate $120 million in annual savings.
Recommendations related to Collective Bargaining
The City should seek productivity gains in waste collection, including optimizing the Uniformed Sanitationmen's Association (USA) labor contract in the upcoming round of negotiations.
The City should pursue collective bargaining changes to increase flexibility and productivity and end certain differentials and bonuses.
Bonuses for meeting productivity targets and dumping on shift should be ended as they are more a function of the neighborhood and housing density than employee productivity.
Key Data
10.7 tons
— Productivity target for refuse collection set by the USA labor contract.
6.2 tons
— Productivity target for recycling collection set by the USA labor contract.
71 percent
— Degree to which refuse collection is more productive than recycling collection.
$120 million
— Potential annual savings from meeting labor productivity targets.
5.6 tons
— Average amount collected per recycling truck shift in 2017.
9.6 tons
— Average amount collected per refuse truck shift in 2017.
Legislative bills providing enhanced benefits to public employees, including changes to death benefits, disability retirement eligibility, and overtime pay calculations, were vetoed in 2018 with associated fiscal costs ranging from minimal to over $13 million. These vetoed measures highlight the financial implications of expanding public sector compensation and retirement packages.
Key Data
$13.2 Million
— The one-time past service cost associated with the vetoed bill enhancing in-service death benefits for state correction officers.
$2.42 Million
— The combined increased annual contributions and immediate past service cost for the vetoed bill regarding accidental disability retirement for law enforcement and forest rangers.
$4.70 Million
— The annual cost increase associated with the vetoed bill removing the limit on overtime pay for calculating final average salary for Tier 6 New York City Transit Authority employees.
$1.50 Million
— The annual and one-time retroactive costs associated with the vetoed bill allowing uniformed court officers and peace officers to retire without early age reduction.
The New York City Housing Authority's Project Labor Agreement, which governs renovation and rehabilitation work, requires an independent evaluation to determine its actual impact on budget, operations, and resident employment before any renewal or modification occurs. This assessment should specifically analyze whether promised labor cost savings and apprenticeship opportunities for residents have been realized.
Recommendations related to Collective Bargaining
The City should conduct an independent evaluation of the Project Labor Agreement's impact on NYCHA's budget and operations, including the speed and quality of work and the cost of renovation and rehabilitation projects.
The evaluation should examine the extent to which NYCHA residents have participated in BCTC pre-apprenticeship and apprenticeship programs annually since the agreement went into effect.
The results of the independent evaluation of the Project Labor Agreement should be made public.
Key Data
3 percent
— Projected savings in labor costs from the Project Labor Agreement.
100 to 120
— Number of union apprenticeship positions the Building and Construction Trades Council was projected to provide annually for NYCHA residents.
New York City taxpayers contribute over $1.1 billion annually to union-administered benefit funds, which often suffer from excessive administrative expenses, unnecessary reserves, and mismanagement. Consolidating these supplemental health and non-health benefits into centralized city programs could save more than $160 million while improving service delivery.
Recommendations related to Collective Bargaining
The Office of the Comptroller should give higher priority to auditing benefit funds as part of its oversight over all city spending.
The City should establish corresponding benchmarks and indicators for Directive #12 that can trigger enforcement powers.
The Office of Labor Relations, in negotiation with labor unions, should expand the Comptroller’s oversight and enforcement authority over union-administered benefit funds.
The City should consolidate supplementary health care benefits under the City’s Health Insurance Plan to increase efficiency.
The City should provide non-health related benefits through a centralized cafeteria plan to allow for benefits to be tailored to an individual rather than an entire union.
Key Data
$1.1 billion
— Projected annual taxpayer contribution to 108 union-administered benefit funds in fiscal year 2018.
$160 million
— Potential annual savings for the City from restructuring how supplemental benefits are provided.
$109.3 million
— Total administrative expenses incurred by 91 benefit funds in fiscal year 2014.
$10.3 billion
— Total City contributions to welfare funds between 2009 and 2017.
$44.5 million
— Total City contributions to welfare funds that were subject to an audit between 2009 and 2017.
New York City faces a $95 billion debt for retiree health benefits, a burden that continues to grow and threatens to divert resources from other municipal needs. Because these benefits are subject to collective bargaining, the City must negotiate with union leaders to implement reforms, such as cost-sharing and more systematic prefunding, to ensure the long-term sustainability of these promises.
Recommendations related to Collective Bargaining
Require workers who retire before Medicare eligibility to pay 50 percent of their health insurance premium.
No longer reimburse for Medicare Part B premiums to eliminate significant annual costs.
Lower the Medicare Part B reimbursement benefit from full reimbursement to 50 percent reimbursement.
End benefits for spouses of retirees to reduce annual outlays.
Reduce to 50 percent the premium payments for Medicare supplemental insurance.
Replace the full premium payments on behalf of retirees and spouses with a voucher to be used for purchase of insurance.
Increase the retirement age for police and firefighters to match teachers’ retirement age of 55.
Provide a fixed payment to municipal employee unions and authorize them to provide retiree health benefits.
Key Data
$95 billion
— The total OPEB debt for New York City.
$4.9 billion
— The current annual normal cost for OPEB.
$2.5 billion
— The current annual PAYGO amount for retiree health benefits.
$150,000
— The average OPEB liability per member.
50 percent
— The amount of health insurance premium workers who retire before Medicare eligibility should be required to pay.
100 percent
— The percentage of the premium for both individual and family coverage that New York City currently covers for retirees.
New York City's waste management system faces significant inefficiencies, with high costs for collection and low participation in organics programs. To address these issues, the City should pursue collective bargaining to implement flexible scheduling, automated collection methods, and the elimination of unproductive productivity bonuses.
Recommendations related to Collective Bargaining
The City should allow greater flexibility in the frequency of collection, scheduling, and recycling practices, including redesigned routes, through collective bargaining.
The City should expand the use of large containers and automated trucks to improve waste collection efficiency.
The City should eliminate “unproductive” productivity bonuses for tons collected per truck shift and for dumping on shift, which are a function of the route and neighborhood rather than actual worker productivity.
Key Data
$3,000
— Estimated cost of a truck run for refuse and recycling in fiscal year 2016.
1 ton
— Average amount of organic material collected per truck run in fiscal year 2016.
6 tons
— Average amount of recycling collected per truck run in fiscal year 2016.
10 tons
— Average amount of refuse collected per truck run in fiscal year 2016.
$640
— Cost per ton for collecting recyclable material.
New York City's uniformed overtime spending has grown significantly, necessitating reforms that should be integrated into upcoming collective bargaining negotiations. A labor-management committee should be established to study overtime drivers and implement targeted policy changes, such as capping sick leave and modifying work rules, to control these rising costs.
Recommendations related to Collective Bargaining
The City should establish a uniformed labor-management committee as part of the next round of collective bargaining in order to reduce uniformed overtime spending.
The City should consider adopting a system in which routine sick leave usage is accrued and capped (as for NYC civilian employees).
The City should consider changing certain work rules, such as eliminating overtime for travel to alternate work locations, and guaranteed minimum overtime hours.
The City should consider instituting a per employee cap on overtime hours or overtime earnings, as exists for civilian employees.
The City should consider capping or eliminating overtime earnings in calculating final average salary for pensions.
The City could set overtime reduction targets for individual uniformed bargaining units as a condition of getting a higher uniformed pattern of wage increases.
Key Data
$1.2 billion
— Annual uniformed overtime costs for fiscal years 2015 and 2016.
$19,400
— Average overtime compensation paid per uniformed employee in fiscal year 2016.
42 percent
— Average amount overtime has exceeded the adopted budget in each of the past nine years.
62 percent
— Growth in overtime spending from fiscal years 2009 to 2016.
53 percent
— Uniformed employees who received overtime that exceeded 20 percent of their base pay in fiscal year 2016.
6 percent
— Uniformed employees who exceeded 50 percent of their base pay in overtime in fiscal year 2016.
The Metropolitan Transportation Authority should pursue productivity savings through cooperative arrangements with the Transport Workers Union, such as altering shift differentials and implementing split shifts, to help cover the costs of hiring 2,700 new workers. Additionally, linking fares to expenses is necessary to maintain pressure on management and labor to control costs, ensuring a clear connection between collective bargaining outcomes and rider costs.
Recommendations related to Collective Bargaining
The MTA and its workforce should more aggressively pursue efficiencies at the agency to make the stabilization plan self-sustaining, such as a cooperative arrangement between MTA management and the Transport Workers Union to provide significant productivity savings.
The MTA should link fares to expenses to maintain pressure on management and labor to keep expenses down, which makes clear to riders the link between collective bargaining and fares.
The MTA should implement productivity savings through measures like altering night shift differentials and using split shifts for operators and conductors to reduce subway operating costs.
Key Data
$456 million
— recurring operating costs, the bulk of which will support the hiring of 2,700 permanent new workers.
2,700
— permanent new workers to be hired under the stabilization plan.
45 to 50 percent
— of mass transit expenses that should be funded by fares to maintain pressure on management and labor.
NYCHA's financial stability has improved due to increased City and federal support, but the agency must continue to implement reforms to address long-term fiscal challenges. Key strategies include negotiating changes to collective bargaining agreements to remove restrictive work rules and improving operational efficiency to reduce high per-unit costs.
Recommendations related to Collective Bargaining
Ease work rule restrictions in the upcoming collective bargaining negotiations.
NYCHA should work with the City’s Office of Labor Relations to negotiate work rule changes with the labor unions in order to codify the schedules in collective bargaining agreements so that no additional financial incentives are required.
Improve services and productivity through new procurement arrangements, such as job order contracts; altering collective bargaining agreements to remove restrictive work rules; and pursuing opportunities to use private management to reduce high per-unit operating costs.
Key Data
$1.1 billion
— Personnel costs, which represent half of the cost of operating public housing, grew 2 percent to $1.1 billion in 2016.
5 percent
— Salaries rose 5 percent between 2013 and 2016 as a result of wage increases in the new collective bargaining agreement.
3 percent
— Fringe benefit costs fell 3 percent between 2013 and 2016.
$54 million
— The City covered the cost of contract raises resulting from collective bargaining settlements, with subsidies amounting to $54 million in City fiscal year 2015.
$50.4 million
— The City covered the cost of contract raises resulting from collective bargaining settlements, with subsidies amounting to $50.4 million in City fiscal year 2016.
$65 million
— The City covered the cost of contract raises resulting from collective bargaining settlements, with subsidies projected to rise to $65 million annually by 2019.
New York City faces upcoming labor negotiations with major unions, where the city has budgeted for annual raises of 1 percent. To manage rising compensation costs, future agreements should prioritize productivity gains and address the city's practice of paying the full cost of employee health insurance premiums.
Recommendations related to Collective Bargaining
Any additional raises should be paid for with productivity gains, which also necessitate settling the contracts promptly, as those gains can only be prospective.
The next round of labor negotiations should build on the savings generated from the City’s partnership with the Municipal Labor Committee.
Health insurance contributions from employees and retirees should be on the table during negotiations.
Key Data
1 percent
— The City budget has put aside funds for raises of 1 percent each year.
100 percent
— The city pays 100 percent of the health insurance premium for most workers.
86 percent
— New York State pays about 86 percent of premiums for individuals.
71 percent
— New York State pays about 71 percent of premiums for families.
With labor contracts for major unions expiring, the city must prioritize a comprehensive collective bargaining agenda that secures productivity gains in exchange for raises. This approach should include settling contracts before expiration dates and implementing strategies to curb rising health insurance and overtime costs.
Recommendations related to Collective Bargaining
The city should require productivity gains in exchange for raises.
In order to secure productivity gains, which cannot be retroactive, the city should settle contracts in advance of their expiration dates.
The City and municipal labor unions should continue the effort to find more health insurance savings during the next contract period, with an expanded focus on programmatic changes to reduce health insurance costs.
The city should pursue strategies that reduce overtime costs as a part of the labor negotiations.
Key Data
1%
— Funding for raises included in the Labor Reserve.
$140,000
— Average spending on salaries and wages, pensions, and fringe benefits per position in fiscal year 2018.
$160,000
— Projected average spending on salaries and wages, pensions, and fringe benefits per position in fiscal year 2021.
331,605
— Projected headcount by fiscal year 2021.
8.1%
— Projected annual growth rate for health insurance costs from fiscal years 2018 through 2021.
$1.7 billion
— Actual annual overtime spending in fiscal years 2015 and 2016.
The School Bus Grant Program, originally intended as a one-year bridge, has been extended for a third year at a cost of over $30 million, undermining the city's competitive bidding process for school-bus transportation. This program effectively provides supplemental funding to private companies to increase employee wages and benefits, bypassing the terms of contracts that were fairly awarded.
Recommendations related to Collective Bargaining
The City Council should defund the School Bus Grant Program in the upcoming budget negotiations.
The city should abide by contracts that it has fairly and competitively awarded.
The City Council should step in, on behalf of taxpayers, and bring the School Bus Grant Program to a stop.
If an administration dislikes contracts awarded by a predecessor, it should seek to renegotiate them at the appropriate time rather than awarding grants to increase payments.
Key Data
$1 Billion
— Annual cost of school-bus transportation contracts prior to re-bidding.
$400 Million
— Savings achieved by the city through re-bidding school-bus contracts without previous employee protections.
$30 Million
— Projected cost of the School Bus Grant Program for its third year.
Metropolitan Transportation Authority fare and toll increase proposals are addressed to manage budget deficits, with collective bargaining outcomes influencing operating expenses and postemployment benefit liabilities. No specific policy recommendations regarding collective bargaining are provided, though financial data impacted by labor costs is cited.
Key Data
42 percent
— Increase in fringe benefits for employees and retirees since the MTA implemented a fare increase in 2009.
$2.7 billion
— The MTA's expected deficit using GAAP in 2017, calculated after halving the annual OPEB liability to reflect the policy of reducing obligations through future collective bargaining.
The Metropolitan Transportation Authority's labor agreement with the Transport Workers Union secures 28 months of labor peace but exceeds the agency's financial plan. This settlement may necessitate increased fares or additional borrowing, while delaying potential productivity improvements from work rule and benefit adjustments.
Wage increases negotiated under Governor Cuomo between fiscal years 2012 and 2017 varied significantly across different public employee unions, ranging from 0% increases in early years to specific lump sum payments and percentage raises in later years. These negotiated contracts reflect the fiscal landscape of the period, with some unions receiving flat dollar payments like $2,625 in 2012 while others saw 2% increases in 2015 and 2016.
Key Data
$2,625
— The 2012 wage increase negotiated for the Police Benevolent Association of New York State (PBANYS).
$2,075
— The 2012 wage increase negotiated for the New York State Correctional Officers and Police Benevolent Association (NYSCOPBA).
$775
— The 2014 lump sum payment negotiated for the Civil Service Employees Association (CSEA).
2%
— The wage increase negotiated for the Public Employees Federation (PEF) in 2015.
1.50%
— The wage increase negotiated for the New York State Police Investigators Association (NYSPIA) in 2017.
The recently settled Public Employees Federation contract increased personnel costs by $75 million in fiscal year 2017. If this agreement sets the pattern for other outstanding collective bargaining agreements, the state faces additional costs of $270 million in fiscal year 2017, rising to $820 million by fiscal year 2020.
Key Data
$75 million
— Increase in personnel costs in fiscal year 2017 to account for the recently settled Public Employees Federation (PEF) contract.
$270 million
— Cost in fiscal year 2017 if the Public Employees Federation contract sets the pattern for all other outstanding collective bargaining agreements.
$820 million
— Cost in fiscal year 2020 if the Public Employees Federation contract sets the pattern for all other outstanding collective bargaining agreements.
New York State's recent collective bargaining agreement with the Public Employees Federation includes 2% annual raises, which are projected to increase personnel costs by at least $260 million in 2017, $520 million in 2018, and $780 million in 2019. These rising personnel expenses, combined with revenue shortfalls, threaten to significantly increase the state's projected 2018 budget deficit.
Key Data
$260 million
— Projected increase in personnel costs for 2017 resulting from the collective bargaining agreement.
$520 million
— Projected increase in personnel costs for 2018 resulting from the collective bargaining agreement.
$780 million
— Projected increase in personnel costs for 2019 resulting from the collective bargaining agreement.
2%
— Annual raise percentage included in the collective bargaining agreement with the Public Employees Federation.
New York City's legacy costs, including debt service, pensions, and retiree health benefits, are projected to exceed $20 billion by fiscal year 2020, outpacing other budget growth. To address this, the city should negotiate reforms to retiree health benefits, union welfare funds, and Medicare Part B reimbursements to achieve up to $1.6 billion in savings.
Recommendations related to Collective Bargaining
Retirees should share in the cost of health premiums to align with other state and local governments.
Reform of union welfare funds is needed, specifically by consolidating supplementary health care benefits under the City’s health plan to improve efficiency.
Medicare Part B premium reimbursements should be eliminated, as this benefit is uncommon among public and private employers.
Key Data
$17.4 billion
— Current annual legacy costs for New York City.
$20.9 billion
— Projected annual legacy costs by fiscal year 2020.
$1.6 billion
— Potential savings by fiscal year 2020 from reforming retiree health benefits and union welfare funds.
20 percent
— The portion of the city budget currently exceeded by legacy costs.
11 percent
— The projected growth rate of non-legacy spending.
New York City's employee compensation costs are rising rapidly, driven by salary and benefit increases that are largely determined outside the standard budget process. To address the city's $70 billion liability for retiree health insurance and other benefits, the government should require employees and retirees to contribute to their health insurance premiums.
Recommendations related to Collective Bargaining
The city government should require employees and retirees to contribute to their health insurance premiums to align with private and public sector standards.
Key Data
$137,000
— Average annual compensation per full-time city employee.
$158,000
— Projected average annual compensation per full-time city employee by 2020.
$70 billion
— City liability for retiree health insurance costs and other post-employment benefits.
$2.1 billion
— Savings realized through fiscal year 2017 from initiatives to control health expenses.
$107,000
— Average compensation cost per employee in fiscal year 2008.
New York City's expenditure growth is largely driven by personal service costs, with salaries and wages set through collective bargaining agreements that provide annual raises between 0 and 3 percent. To offset these costs, a 2014 health savings agreement with the Municipal Labor Committee is projected to yield $3.4 billion in savings between fiscal years 2015 and 2018.
Key Data
0 and 3 percent
— Annual raises provided to workers under seven-year collective bargaining contracts covering much of the 2014 to 2020 period.
1 percent
— Assumed wage increases in the Financial Plan for the years after current collective bargaining contracts expire.
$1.4 billion
— Estimated lump-sum payments to teachers, nurses, and other personnel in fiscal year 2020 related to collective bargaining settlements.
$3.4 billion
— Total savings generated by the May 2014 health savings agreement between the City and the Municipal Labor Committee between fiscal years 2015 and 2018.
The New York City Fire Department faces a significant mismatch between its traditional resource allocation, which prioritizes firefighting, and its actual workload, which is dominated by medical emergencies. To address this, the department must implement more flexible staffing arrangements through collective bargaining and increase medical training for firefighters to better serve the city's needs.
Recommendations related to Collective Bargaining
The department should implement new and more nimble staffing arrangements through collective bargaining to better align resources with service demands.
Legislative proposals to enhance public employee benefits, such as pensions, disability payments, and early retirement plans, threaten to impose significant new costs on state and local governments. These bills risk undermining previously enacted reforms that were designed to generate long-term savings for taxpayers.
Recommendations related to Collective Bargaining
The Legislature should reject the bills detailed in the scorecard because they impose expensive mandates on New York State and local governments without improving services for taxpayers.
Policymakers should maintain hard-fought reforms that yield significant savings rather than enhancing expensive employee benefits.
Key Data
$21 billion
— Projected savings from reforms to disability benefits for recently hired New York City police and fire employees over 30 years.
$46 million
— First-year cost of bill A4295, which would allow judges or justices to use their most recent annual salary to calculate pension amounts.
$21 million
— Annual cost of bill A9850/S7232, which would decrease the employee contribution rate under the New York City Transit Authority 25-year/55-age plan.
$36 million
— First-year cost of bill S5245, which would enhance in-service death benefits for retirement-eligible State correction officers.
$16 million
— Annual cost to New York City of bill A6988/S5972, which would expand eligibility for variable supplement fund payments.
$13.9 million
— First-year cost of bill A7801-A/S5936, which would enhance in-service death benefits for retirement-eligible State correction officers.
New York City's efforts to achieve health care savings through collective bargaining have yielded mixed results, with significant portions of savings coming from lower-than-expected premium increases rather than structural reforms. To improve long-term fiscal health, the city should prioritize recurring cost-reduction measures, such as regular audits of dependent eligibility and ending unnecessary deposits into the Health Insurance Stabilization Fund.
Recommendations related to Collective Bargaining
The City and the Municipal Labor Committee should work together to end further deposits by the City into the Health Insurance Stabilization Fund.
The City should gain authority to conduct audits of dependent eligibility regularly as a matter of managerial discretion.
The City and the Municipal Labor Committee should continue to pursue reforms that reduce overutilization of health services to improve health outcomes and achieve recurring savings.
Key Data
$1.1 billion
— Estimated savings claimed from lower than projected premium rate increases.
$477 million
— Anticipated savings from changes that will reduce healthcare costs on a recurring basis.
$147 million
— Expected savings in fiscal year 2017 from GHI plan changes and new co-pays.
$85 million
— Estimated savings in fiscal year 2017 from the transition to the HIP HMO Preferred plan.
$528 million
— Savings derived from other sources, including terminating ineligible dependents and funds from the Health Insurance Stabilization Fund.
$23 million
— Projected savings in fiscal year 2017 from new care management programs for chronic conditions.
The state should reform the binding arbitration process for collective bargaining units by requiring arbitrators to account for the full cost of decisions, including retroactive pay and fringe benefits, without relying on tax increases or fiscal gimmicks. These stricter criteria should apply to all local governments rather than being limited to those in the bottom quartile of tax rates and fund balances.
Recommendations related to Collective Bargaining
Arbitrators should account for the full cost of a decision, including retroactive pay and the impact on fringe benefits, without increasing taxes, making service cuts, or employing fiscal gimmicks.
These more specific criteria for binding arbitration should be applicable to all local governments, not just those in the bottom quartile of tax rates and fund balances.
New York City's decision to increase wages for public and nonprofit employees mid-contract without securing offsetting productivity gains undermines the integrity of established labor agreements and contracting practices. These modifications, which break established wage patterns, impose additional costs on taxpayers without delivering improved services or efficiencies.
Recommendations related to Collective Bargaining
At a minimum, changes to labor contracts should wait until contracts expire and are up for renewal or renegotiation.
At best, the costs of contract modifications will be offset with increased productivity or efficiencies to improve service delivery.
Occasions for reopening contracts should be limited, and negotiations regarding labor agreements should not be a one-way street in which taxpayers give but receive nothing in return.
Key Data
$238 million
— Total costs through fiscal year 2020 for wage increases for public and nonprofit employees.
$36 million
— Cost of wage increases for public employees, mostly represented by District Council 37 and the Communication Workers of America.
$202 million
— Cost of wage increases for nonprofit employees contracted by the City.
10.4 percent
— Compounded wage increase over seven years in the July 2014 DC37 labor agreement.
100,000
— Number of municipal employees represented by DC37.
4,500
— Number of workers in three job titles whose wages were raised to $11.50 per hour in March 2015.
New York school districts face significant budget constraints due to rapidly rising fringe benefit costs, which have outpaced salary growth and limited funding for other educational needs. Because school districts only control health insurance benefits through collective bargaining while pension benefits are mandated by the State Legislature, curbing these costs requires legislative action to ensure funds are available for student outcomes.
Recommendations related to Collective Bargaining
The State Legislature should include employee benefits in the conversation as it debates its role in public education.
School districts should limit the cost of fringe benefits to ensure schools can fund investments essential to improving quality and outcomes for students.
Key Data
22 percent
— of 2013 budgets allocated to instructional staff fringe benefits by New York schools, compared to a national average of 15 percent.
$4,412
— per student spent on fringe benefits for the average New York school district in 2013, nearly triple the national average of $1,609.
9.4 percent
— average annual increase in instructional employee benefits from 2003 to 2013, compared to 3.4 percent growth for teacher salaries.
4.2 percent
— growth in fringe benefits for teachers in 2013, while spending on teacher salaries and wages grew only 0.6 percent.
New York City's health insurance costs doubled to $5.3 billion between 2005 and 2015, prompting a collective bargaining agreement with the Municipal Labor Committee to achieve $3.4 billion in savings through 2018. Current savings are largely attributed to lower-than-expected premium increases rather than structural reforms, potentially resulting in $2.5 billion in savings without any affirmative actions to improve health care delivery.
Recommendations related to Collective Bargaining
Initiatives should "bend the cost curve" and achieve recurring savings for City taxpayers by establishing premium-sharing with employees and retirees, reducing per enrollee utilization of services, better managing chronic conditions, or lowering provider payments.
Savings should be counted clearly and honestly, meaning that lower national and regional health care inflation, temporary premium rate "freezes," and unusually low premium increases should not be credited as savings gained under the agreement.
The City should pursue initiatives such as reducing emergency room utilization and improving chronic disease management, as these should be the basis for meeting the savings targets established in the health agreement.
Key Data
$5.3 billion
— Cost of the City's health insurance plan in fiscal year 2015.
$3.4 billion
— Total savings target agreed upon by the City and the Municipal Labor Committee between fiscal year 2015 and 2018.
$1.2 billion
— Savings credited to the MLC agreement in the November modification.
$2.5 billion
— Total savings attributed to the MLC agreement without affirmative actions to improve the delivery of health care.
$2.6 billion
— Cost of the City's health insurance plan in fiscal year 2005.
2.89 percent
— The City's actual health insurance rate increase for fiscal year 2016.
The Municipal Labor Committee agreement requires an objective system to measure health insurance savings, ensuring that only structural changes that reduce costs are credited toward savings targets. Genuine savings must be recurring and verifiable, rather than relying on temporary rate freezes or transfers from the Health Insurance Stabilization Fund.
Recommendations related to Collective Bargaining
The City should establish an objective system for measuring savings to ensure they are recurring and effectively bend the curve in health care costs.
Savings calculations should be based on an agreed-upon baseline number of people covered, meaning demographic changes or headcount fluctuations should not affect the baseline.
The City should implement a reliable mechanism for recouping amounts of planned savings that are not actually achieved during a fiscal year.
Temporary 'freezes' or low premium rate increases not supported by specific benefit structure changes should not be credited as savings.
Additional funding taken from the Health Insurance Stabilization Fund beyond the $1 billion already agreed upon should not count as savings.
Key Data
$1 billion
— The amount of funding from the Health Insurance Stabilization Fund that should not be exceeded when calculating savings.
$2,000,000
— The baseline and actual cost for the hypothetical radiation services program in fiscal year 2014.
$2,736,126
— The projected baseline cost for the hypothetical radiation services program in fiscal year 2018.
$527,748
— The projected savings for the hypothetical radiation services program in fiscal year 2018.
Recent labor contract settlements with major unions, including 1199SEIU and NYSNA, are estimated to cost $879 million over the 2014 to 2021 period. While the City has agreed to cover these incremental costs with a $95 million initial transfer, this reliance on City funding creates potential future fiscal risks for the health system.
Key Data
$879 million
— The estimated cost of 1199SEIU and NYSNA labor contracts over the 2014 to 2021 fiscal years.
$431 million
— The estimated cost of 1199SEIU and NYSNA labor contracts over the 2015 to 2018 financial plan.
$95 million
— The initial transfer appropriated by the City Council to cover the incremental cost of labor contracts.
2,366
— The number of employees covered by the 1199SEIU contract.
8,314
— The number of employees covered by the NYSNA contract.
New York City's municipal garbage collection system is significantly more expensive than private-sector alternatives, with $2.3 billion spent annually on waste management. Through upcoming labor negotiations and legislative changes, the city could achieve substantial annual savings by modernizing collection methods, increasing automation, and eliminating outdated productivity bonuses.
Recommendations related to Collective Bargaining
The City should promote flexibility in refuse collection frequency, shift scheduling, and recycling practices during upcoming contract negotiations to better meet neighborhood needs.
The City should expand the use of one-worker, automated trucks from 8 percent to 18 percent to increase collection efficiency.
The City should eliminate "unproductive" productivity bonuses for DSNY workers, as meeting the criteria is currently a function of route assignments rather than actual productivity.
Key Data
$96 million
— Annual savings from the three short-term reforms to the municipal Department of Sanitation.
$72 million
— Annual savings from redesigning routes to increase the average amount of refuse collected per truck-shift from 10 to 12 tons.
$20 million
— Annual savings from expanding the use of one-worker, automated trucks from 8 percent to 18 percent.
$4 million
— Annual savings from eliminating "unproductive" productivity bonuses for DSNY workers.
$2.3 billion
— Amount spent annually on both the public and private systems of handling trash in New York City.
$300 million
— Annual savings from the four long-term reforms to the garbage collection system.
New York City's fiscal year 2015 budget incorporates significant labor settlements that establish a new wage pattern for the municipal workforce, costing $13.6 billion through 2018. To manage these rising personnel expenses, the city must secure recurring health care savings and leverage contract negotiations to implement operational efficiencies.
Recommendations related to Collective Bargaining
The Administration and the Municipal Labor Committee should agree to changes that provide recurring savings on rapidly-growing health care costs.
Only changes that make the system operate more efficiently, reduce utilization of services, or reduce the city’s costs, through premium-sharing or lower payments to providers, should be adopted.
To the extent the necessary changes need to be collectively bargained, part of the ensuing savings could be used to fund larger wage increases or productivity bonuses.
Key Data
$13.6 billion
— Gross cost of negotiating labor agreements with the entire municipal workforce between fiscal years 2014 and 2018.
$1 billion
— Amount drawn from the off-budget Health Insurance Stabilization Fund to offset the cost of labor agreements.
$3.4 billion
— Targeted savings in health care costs agreed upon by the Administration and the Municipal Labor Committee.
$1.3 billion
— Recurring savings in health care costs expected after the initial targeted savings.
39 percent
— Projected growth in health care costs by the end of the financial plan in 2018 without the implementation of negotiated savings.
The agreement with the Municipal Labor Committee relies on temporary measures like artificial rate caps rather than structural health insurance reforms to achieve savings. These calculations are flawed because they attribute savings to the agreement that may actually result from broader national or regional health care inflation trends.
To ensure health insurance savings under the Municipal Labor Committee agreement are genuine and recurring, the city should implement a rigorous measurement system based on specific, verifiable changes in plan benefit structures. This approach requires excluding temporary measures, such as premium freezes or fund transfers, and instead focusing on sustainable reductions in provider payments and service utilization.
Recommendations related to Collective Bargaining
The city should establish an objective system for measuring savings that are recurring and of a nature that truly "bends the curve" in health care costs.
Savings measures should be associated with specific changes in the plan benefit structure that either reduce provider payment levels or reduce utilization of a particular service.
The city should have a reliable mechanism for recouping amounts of planned savings not actually achieved during a fiscal year.
Savings should be based on an agreed upon baseline number of people covered, meaning increases or decreases in headcount should not affect the calculation.
National and regional trends in health care inflation unrelated to the initiatives launched as a part of this joint effort should not affect the calculation of savings.
Temporary "freezes" or low premium rate increases not supported by specific benefit structure changes should not be credited as savings.
Additional funding taken from the Health Insurance Stabilization Fund beyond the $1 billion already agreed upon should not count as savings.
Savings from centralized purchase of prescription drugs not offset by reductions in related union welfare fund contributions should not be counted as savings.
Reductions in the number of people covered due to eligibility audits should be credited as savings toward the targets.
Options for moving some or all from City plans to those available on the New York State Health Exchange should be studied as part of the joint efforts.
Key Data
$1 billion
— Amount already agreed upon in the Health Insurance Stabilization Fund that should not be counted as savings if additional funding is taken.
1,000,000
— Baseline assumption of enrollees used in the hypothetical program to centralize radiation services.
$100
— Fiscal year 2014 average payment per service in the hypothetical radiation services centralization model.
3.0%
— Annual historical trend increase in payment per service for radiation services.
5.0%
— Annual historical trend increase in utilization per 1,000 enrollees for radiation services.
$527,748
— Projected savings in fiscal year 2018 from the hypothetical program to centralize radiation services.
New York City's garbage collection system is exceptionally expensive, with public sector costs significantly exceeding those of private carters and other major cities due to inefficient labor contract provisions. The upcoming sanitation worker contract negotiations offer a critical opportunity to address these high costs by reforming compensation, productivity bonuses, and rigid scheduling practices.
Recommendations related to Collective Bargaining
The City should address the compensation cost of a City sanitation worker, which begins at more than $100,000 and averages more than $150,000 annually.
The City should reform 'productivity' bonuses in the new labor contract, as taxpayers are not receiving increased productivity in exchange for these payments.
The City should renegotiate sanitation routes and schedules currently incorporated in union contracts to eliminate inefficiencies like minimum refuse collection frequency and inflexible eight-hour shifts.
The City should address the heavy reliance on DSNY for snow removal in the new contract, which currently guarantees at least 8 hours of pay at time and a half for unscheduled shifts.
Key Data
$100,000
— The starting compensation cost for a City sanitation worker.
$150,000
— The average annual compensation cost for a City sanitation worker, including direct wages and fringe benefits.
$431
— The average combined collection and disposal cost per ton for the Department of Sanitation.
$185
— The average combined collection and disposal cost per ton for private carters.
$307
— The cost per ton for the Department of Sanitation to collect trash.
$124
— The cost per ton for the Department of Sanitation to dispose of trash.
The tentative agreement with the teachers union and the associated executive budget create significant fiscal uncertainty, with the total cost of applying the deal's pattern to all municipal workers reaching $17.7 billion. While the agreement includes health insurance savings and deferred back pay, the reliance on uncertain savings and the extension of payment timelines for current services set a concerning precedent for public finance.
Recommendations related to Collective Bargaining
This year’s taxes should pay for this year’s services.
Key Data
$17.7 billion
— Total cost of applying the teachers' deal pattern to all workers and providing back pay.
$3.4 billion
— Savings in health insurance costs committed by the unions over the next four years.
$3.2 billion
— Budget gap in fiscal year 2018.
10%
— Raises for most workers other than teachers over seven years.
$1 billion
— Tax dollars from a jointly controlled fund used to help pay for raises.
NY1 The tentative agreement between Mayor Bill de Blasio and the city's teachers union cleared a significant hurdle Friday, but some budget watchdogs are questioning whether a key provision of the deal, to cut health care costs, will actually work.
The tentative agreement between New York City and the teachers union provides wage increases of 1% to 3% over five years, costing approximately $4 billion. Its long-term financial viability depends on achieving $3.4 billion in health care savings, which could be secured by requiring employees and retirees to contribute to their health insurance premiums.
Recommendations related to Collective Bargaining
The agreement's affordability rests on ensuring concrete savings from health care costs.
More predictable savings are possible by requiring employees and retirees to share in the cost of their health insurance premiums, just as most public and private employees do.
Key Data
1% to 3%
— Wage increases for teachers from 2013 through 2018.
$4 billion
— Estimated cost of the teachers' contract over the next four years.
$400 million
— Additional salary growth for employees in fiscal year 2015.
$1.5 billion
— Projected salary growth for employees in fiscal year 2018.
$3.4 billion
— Estimated new health care savings to be determined by city and labor officials.
New York City's health insurance policies for employees and retirees are significantly more generous than those of comparable public and private employers, as the City currently pays the full premium for most workers. Implementing premium-sharing and eliminating Medicare Part B reimbursements would align the City with national standards and generate billions in savings, though these changes require negotiation with labor leaders.
Recommendations related to Collective Bargaining
The City should implement premium-sharing by employees, as employee contributions toward the cost of health insurance are the norm in the private sector and in state and local governments.
The City should require premium-sharing by retirees, as public sector state and local governments typically require retirees to contribute more toward the cost of health insurance premiums than they did as employees.
The City should eliminate Medicare Part B reimbursement, as this practice is rare even among state and local governments.
Key Data
$1.8 billion
— Total savings in fiscal year 2014 if the recommended premium-sharing and Medicare Part B reimbursement changes are adopted.
$2.2 billion
— Total savings in fiscal year 2016 if the recommended premium-sharing and Medicare Part B reimbursement changes are adopted.
$280 million
— Annual savings from eliminating Medicare Part B reimbursement entirely.
$180 million
— Annual savings from requiring a 5% employee contribution for single and family health insurance coverage.
$45 million
— Annual savings from eliminating spousal Medicare Part B reimbursement.
This presentation was given during CBC's Conference on The Most Important Economic and Fiscal Decisions Facing the Next Mayor , which took place on December 6, 2013.. CBC provides a framework for curbing expenditures effectively and provides 8 options for savings: Implementing health insurance premium-sharing; Consolidating union welfare funds;…
Binding arbitration laws for uniformed personnel often fail to adequately account for the fiscal health of local governments, leading to unsustainable wage awards that pressure municipal budgets. Reforms are necessary to redefine "ability to pay" and provide arbitrators with the guidance needed to ensure contract settlements do not necessitate tax increases or service cuts.
Recommendations related to Collective Bargaining
State leaders should amend the statute to address its key weakness: inadequate consideration of the fiscal condition of State and local governments.
The statute should be revised to define “ability to pay” as the capacity to pay all costs—including related fringe benefits— of the imposed contract from recurring resources without increasing taxes, making service cuts or employing fiscal gimmicks.
Guidance and training should be provided to arbitrators so they understand how to judge “ability to pay” based on this more specific definition.
Key Data
10
— Number of contracts Suffolk County has settled with uniformed personnel through arbitration since 2000.
one-third
— Portion of the full-time county workforce in Suffolk County comprised of police officers.
20 years
— Time period during which directly negotiated contracts with police officers in Suffolk County have been rare.
New York City faces a significant fiscal challenge as all municipal labor contracts have expired, with no budgetary reserves set aside to cover potential retroactive wage increases. Settling these contracts could create a $7 billion budget gap in fiscal year 2014, as each 1 percent raise for the workforce increases annual operating costs by approximately $300 million.
Recommendations related to Collective Bargaining
A more holistic approach would consider reforms to health insurance, salaries, work rules, productivity and cross-agency collaboration.
New Yorkers should pay attention to contract negotiations—they will bear the cost of the outcome.
Key Data
$7 billion
— The potential budget gap in fiscal year 2014 if labor contracts are settled with retroactive pay and wage increases.
$300 million
— The annual increase in operating costs for every 1 percent raise awarded to the city workforce.
$3.5 billion
— The cost of retroactive pay in fiscal year 2014 if two 4 percent raises are awarded to teachers and principals.
$3.7 billion
— The cost in fiscal year 2014 of providing 2 percent wage increases to the entire workforce.
$30 million
— The cost of a one percent raise for members of the Patrolmen’s Benevolent Association.
$72 billion
— The total budget of the City of New York, of which personnel costs make up more than half.
Negotiating expired municipal labor contracts presents a significant fiscal challenge for the next mayor, as retroactive pay raises could cost over $7 billion in a single year. Without careful management, these potential settlements threaten to force sharp tax increases and significant spending cuts to the city's budget.
Recommendations related to Collective Bargaining
Taxpayers should pay attention to how candidates handle their courtship of union members' votes regarding the high-stakes negotiations of municipal labor contracts.
New Yorkers should take the time to understand the issue of municipal labor contracts, as they will be paying the bill.
Key Data
$72 billion
— The total size of the city's budget, of which personnel costs make up more than half.
$7 billion
— The potential one-time cost of granting retroactive pay raises in the fiscal year 2014 operating budget.
10 percent
— The portion of the operating budget that would be consumed by the one-time cost of retroactive pay.
$3 billion
— The estimated future recurring annual costs if retroactive pay is granted.
New York's binding arbitration laws for police and firefighter unions currently disadvantage taxpayers by hindering good-faith negotiations and resulting in generous awards that ignore municipal fiscal constraints. Reforms are needed to establish stricter decision criteria, impose time limits on the arbitration process, and redefine "ability to pay" to ensure contracts are funded through recurring resources without tax hikes or service cuts.
Recommendations related to Collective Bargaining
Revising the binding arbitration law to strengthen localities' position is necessary to incentivize union leaders to negotiate.
A better set of rules would give arbitrators more guidance in making determinations and assure that the process, once invoked, moves expeditiously.
The changes should include time limits and deadlines that avoid the uncertainties and risks arising from delayed, retroactive wage awards.
New, more specific decision criteria should place greater emphasis on the fiscal condition of local governments.
“Ability to pay” should be defined as the capacity of a locality to pay all costs of the imposed contract from recurring resources (including savings from productivity gains) without increasing taxes, making service cuts or employing fiscal gimmicks.
Key Data
4.5%
— Wage increase awarded to New York City police officers for the 2004-2006 contract.
5%
— Wage increase awarded to New York City police officers for the 2004-2006 contract.
2%
— Proposed annual raise limit for localities meeting a definition of fiscally distressed.
New York City's health insurance costs for public employees and retirees are projected to grow by nearly 40% by 2016, contributing significantly to the city's budget deficit. Implementing premium-sharing, where employees contribute 10% for individual and 25% for family coverage, could generate substantial savings of $1.8 billion in fiscal year 2014.
Recommendations related to Collective Bargaining
Lawmakers and labor should reach an agreement to implement premium-sharing for health insurance.
City employees should contribute 10% for individual and 25% for family coverage, similar to most U.S. workers.
Retirees should pay for 50% of the health insurance premium.
The city's reimbursement for Medicare Part B premiums should be phased out.
Key Data
40%
— Projected growth of health insurance costs for New York City public employees and retirees by 2016.
$7 billion
— Projected annual cost of health insurance for New York City public employees and retirees by 2016.
$1.5 billion
— Portion of the projected 2016 budget deficit attributable to the growth in health insurance costs.
$1.8 billion
— Projected immediate savings in fiscal year 2014 from implementing premium-sharing.
$2.2 billion
— Projected savings in fiscal year 2016 from implementing premium-sharing.
New York City's health insurance costs for employees and retirees have more than doubled over the last decade, creating a significant fiscal burden that requires urgent reform. Implementing premium-sharing for active employees and retirees, alongside the elimination of Medicare Part B reimbursements, would generate billions in savings and align the city's benefits with broader public and private sector standards.
Recommendations related to Collective Bargaining
The City should implement premium-sharing for active employees to align with private sector and other municipal government standards, which would generate significant annual savings.
The City should require premium-sharing by retirees, as few private sector employers offer retiree health insurance and public sector peers typically require higher contributions from retirees than from active employees.
The City should eliminate Medicare Part B reimbursement for retirees and their spouses, as this practice is rare among other state and local governments.
Key Data
$1.8 billion
— The total savings in fiscal year 2014 if the proposed premium-sharing and Medicare Part B reimbursement elimination recommendations are adopted.
$2.2 billion
— The projected total savings in fiscal year 2016 if the proposed premium-sharing and Medicare Part B reimbursement elimination recommendations are adopted.
$83 billion
— The estimated unfunded liability for retiree health insurance and other post-employment benefits (OPEB) as of fiscal year 2011.
$280 million
— The cost to the City in fiscal year 2013 for reimbursing retirees and their spouses for the full out-of-pocket cost of Medicare Part B premiums.
$3.5 billion
— The total cost of employee health insurance premiums to the City in fiscal year 2013.
$1.4 billion
— The total cost of retiree health insurance premiums to the City in fiscal year 2013.
Port Authority of New York and New Jersey police officers receive compensation that is significantly higher than that of most other regional law enforcement agencies, driven by both higher base salaries and more generous supplemental pay. The next collective bargaining agreement should aim to narrow these disparities by aligning officer compensation more closely with that of other large urban police departments in the region.
Recommendations related to Collective Bargaining
The next contract for PANYNJ officers should make progress in aligning their pay to that of officers in large urban departments in the region.
The specific terms of the new contract should be set by collective bargaining, but the result should be hourly rates that are much closer to those of their counterparts in the region served.
Key Data
$83.99
— The hourly pay of PANYNJ senior officers in 2009.
$117,884
— The total annual earnings of PANYNJ officers at 25 years of service in 2009.
$16,458
— The average overtime earnings for all PANYNJ officers in 2009.
1,700
— The approximate number of officers in the PANYNJ police force.
$406 Million
— The PANYNJ's 2012 budget allocation for the Public Safety Department.
$372 Million
— The PANYNJ's 2012 budget allocation for personal service items.
New York's public education system spends $18,825 per pupil annually, significantly more than the national average, yet student achievement remains average, largely due to inequitable distribution of funds and high costs for employee fringe benefits. To address these inefficiencies, the state should reform state aid formulas, cap school district employer contributions for health insurance, and eliminate burdensome special education mandates.
Recommendations related to Collective Bargaining
The legislature and the Governor should work together to establish a statutory cap on school district employer contributions at 85 percent for single coverage and 75 percent for family coverage.
School districts in New York State, including New York City, should change their health insurance premium-sharing arrangements to match those of the State of New York for its employees.
Key Data
$4.7 billion
— Annual spending by school districts in New York State, including New York City, on health insurance for employees and retirees.
$500 million
— Potential annual savings if school districts changed their health insurance premium-sharing arrangements to match those of the State of New York for its employees.
$3,688
— Per student amount spent on employee fringe benefits in New York, compared to a U.S. average of $1,330.
$1,330
— U.S. average per student amount spent on employee fringe benefits.
$11.4 billion
— Statewide special education spending in the decade ending in 2010.
$40,000
— Instructional spending per pupil on students classified for special education services in some districts.
New York school districts should renegotiate health insurance premium sharing arrangements through collective bargaining to align with state employee standards, potentially saving over $500 million annually. Modernizing these agreements would help address rising fringe benefit costs, which have significantly outpaced national growth rates over the last decade.
Recommendations related to Collective Bargaining
School districts should bargain more successfully with teachers’ unions to give employees a greater stake in cost containment through the sharing of health insurance premium costs.
School districts should change their health insurance premium sharing arrangements to match those of the State of New York for its employees to achieve significant cost savings.
Key Data
$500 million
— The potential annual savings if school districts changed their health insurance premium sharing arrangements to match those of the State of New York.
$310 million
— The portion of the $500 million in annual savings attributable to the New York City Department of Education.
$220 million
— The portion of the $500 million in annual savings attributable to school districts in the rest of the state.
$4.7 billion
— The amount spent by school districts in New York State, including New York City, on health insurance for employees and retirees in 2009.
10 percent
— The average annual increase in health insurance expenditures for school districts over the past decade.
Local governments in New York face severe fiscal pressure due to state-imposed mandates and limited revenue options, necessitating structural reforms to manage budgets effectively. A critical step toward fiscal health is the repeal of the Triborough Amendment, which hinders effective collective bargaining by mandating automatic salary increases for public employees after contracts expire.
Recommendations related to Collective Bargaining
One measure that would make a significant difference is the repeal of the state law, known as the Triborough Amendment, which discourages collective bargaining by awarding public employees automatic 'step increases' for more years on the job even after contracts expire.
Rising costs for retiree health benefits are creating massive unfunded liabilities, forcing local governments to choose between reducing these benefits or cutting essential public services. Proposed legislation that would require union approval through collective bargaining to adjust these benefits threatens to remove the fiscal flexibility officials need to manage these growing expenses.
Recommendations related to Collective Bargaining
State legislators should not pass bills that would prevent government officials from reducing current benefit levels, as this would force them to sacrifice core services instead of using their discretion to alter retiree health insurance.
Elected officials should retain the latitude to address retiree health-insurance costs, rather than having their hands tied by legislation that requires collective bargaining to make any changes.
Local governments and school districts should be allowed to make reasonable reductions in benefits to avoid cuts in crucial services like police, fire, and schools.
Key Data
$1.6 billion
— The amount New York City will pay for health insurance for retired government employees in fiscal year 2012.
$1.3 billion
— The amount the state paid for retiree health care in fiscal year 2011-12.
44 percent
— The increase in retiree health-insurance costs in the city budget from five years ago.
$84 billion
— The estimated unfunded liability for retiree health benefits for the city.
$56 billion
— The estimated unfunded liability for retiree health benefits for the state.
$200 billion
— The Empire Center's estimate of the statewide unfunded liability in 2010.
New York City's method for determining prevailing wages lacks transparency, as the specific collective-bargaining agreements used as models are not publicly disclosed. Before expanding these requirements, the City Council must mandate that the Comptroller clarify the methodology, identify the agreements used, and simplify the criteria for establishing job titles.
Recommendations related to Collective Bargaining
The council shouldn’t expand this law without also requiring more public information and explanation about how these standards, which have such an important effect on city public works, are developed.
The City Council shouldn’t expand prevailing-wage requirements without also specifying how these standards are to be set.
The City Council should direct the comptroller to clarify and make public his methodology.
The comptroller should periodically re-examine the criteria for establishing job titles and consider whether changes can be made to simplify the schedules and reduce the cost of compliance.
Collective-bargaining agreements used to set prevailing-wage rates should be identified on the schedules and posted online.
Key Data
30 percent
— The portion of workers in a job title that must be covered by a union contract for it to be used as the basis for setting prevailing-wage rates.
Prevailing wage mandates in New York City are determined by collective bargaining agreements covering at least 30 percent of workers, often resulting in compensation levels significantly higher than private sector averages. To improve transparency and accuracy, the calculation methods should be reformed to use broader survey standards and clearly identify the agreements used to set these rates.
Recommendations related to Collective Bargaining
Efforts should be undertaken to ensure wage surveys are inclusive and widely administered, and the definition of prevailing wage should be broadened to a standard greater than 30 percent.
The State Labor Commissioner and the City Comptroller should take steps to improve transparency in the determination of prevailing wage.
They should exercise their discretion to re-examine the criteria for establishment of titles and consider whether changes to prevailing wage schedules could be made within occupations to simplify the schedules and reduce the cost burden.
Collective bargaining agreements used to set prevailing wage rates should be identified on the schedules.
Contractual agreements relevant to the determination of the prevailing wage should be posted online.
Key Data
30 percent
— The threshold of trade union membership in a jurisdiction required for a local collective bargaining agreement to set the prevailing wage.
165 – 167%
— The ratio of New York City prevailing wages to private sector wages for boilermakers.
91 – 99%
— The supplemental rate as a percent of the wage rate for truck drivers.
75 – 200%
— The ratio of New York City prevailing wages to private sector wages for electricians.
at least a third
— The amount the supplemental rate for fringe benefits generally adds to the cost of wages.
The Metropolitan Transportation Authority faces significant financial constraints, necessitating a "net-zero" wage increase for transit workers to avoid further fare hikes or service reductions. To maintain a fair standard of living while ensuring fiscal responsibility, the agency should pursue productivity-enhancing work rule changes, such as merging conductor and train operator roles, and increase employee contributions toward health insurance premiums.
Recommendations related to Collective Bargaining
The arbitration panel should award a "net-zero" wage increase to maintain a fair standard of living for workers without harming riders or the MTA’s finances.
The MTA should pursue work rule changes that will produce savings, such as merging the position of “conductor” and “train operator” to allow for more efficient operations.
The MTA should increase employee responsibility for health insurance costs by implementing premium-sharing, increasing the contribution toward retiree health insurance, or ending the partial Medicare Part B reimbursement.
The MTA should prioritize the accelerated installation of clear partitions for buses to improve the safety of transit workers.
The MTA should provide enhanced maternity benefits as part of a settlement that includes productivity concessions.
Key Data
$720 million
— Projected annual savings from the MTA's 'top-to-bottom' efficiency program in 2012.
$42 million
— The cost increase for every one percentage point wage increase awarded to the TWU.
$1.4 billion
— Total revenue expected to be raised from fare increases by 2015.
$140,176
— Average annual compensation for New York City Transit heavy rail vehicle operators in 2010.
$125,260
— Average annual compensation for New York City Transit bus vehicle maintenance employees in 2010.
$256.4 million
— Projected budget gap in 2014 if an award along the lines of projected inflation is granted.
New York's pension costs for state and local government employees are among the highest in the nation, contributing significantly to the state's tax burden and threatening the delivery of public services. Proposed reforms, including a 401(k)-style option and an increased retirement age, aim to modernize benefits for future employees and save taxpayers an estimated $123 billion over the next 30 years.
Recommendations related to Collective Bargaining
The state should reform and modernize pension benefits for new employees by offering a 401(k)-style option.
Future employees who opt for the traditional defined benefit plan should contribute between 3% and 6% of their paychecks toward their pensions.
The state should raise the retirement age from 62 to 65 for future employees.
The state should bar overtime from pension calculations for future employees.
New employees should be given the opportunity to enroll in a 401(k)-style plan as an alternative to traditional pensions.
Key Data
$574
— New Yorkers pay $574 per person per year in taxes for public employee pensions.
$2 billion
— State government pension costs are projected to increase to $2 billion by FY 2014.
$8.6 billion
— New York City’s pension costs are expected to reach $8.6 billion by FY 2014.
$1 billion
— MTA pension costs will rise to $1 billion in FY 2014.
$123 billion
— Proposed changes would save taxpayers an estimated $123 billion over the next 30 years.
14%
— New York City's pension costs have an average annual growth rate of 14%.
The Bloomberg Administration's recent agreements with municipal unions to avoid layoffs relied primarily on city resources and one-time revenue sources rather than significant labor concessions. To achieve sustainable, recurring savings and avoid future layoff threats, the city should eliminate the Absent Teacher Reserve and implement employee health insurance premium co-payments.
Recommendations related to Collective Bargaining
The Citizens Budget Commission recommends eliminating the Absent Teacher Reserve (ATR) altogether to achieve recurring savings.
The Citizens Budget Commission recommends revising employee health insurance arrangements by requiring all employees to make premium co-payments of 10 percent for individual and 25 percent for family health coverage.
Key Data
$625 million
— Potential savings in fiscal year 2012 from requiring employee health insurance premium co-payments.
$100 million
— Estimated savings from eliminating the Absent Teacher Reserve.
$315 million
— Budgeted savings from 4,600 teacher layoffs.
$255 million
— Funding from City resources used to prevent teacher layoffs.
$60 million
— Savings from UFT concessions, including the delay of sabbaticals and reduced restrictions for ATR teachers.
$16 million
— Savings from the agreement with District Council 37 regarding Department of Parks and Recreation workers.
The 2012 New York City budget agreement avoided immediate layoffs but failed to address the structural growth of health insurance, pension, and debt service costs. To achieve long-term fiscal stability, the City must negotiate reforms with labor leaders, including premium-sharing for health insurance and adjustments to pension benefits for future employees.
Recommendations related to Collective Bargaining
The City’s leaders must work with the Municipal Labor Committee to reform health insurance arrangements.
Employees and retirees should be required to pay a share of their health insurance premiums to lower taxpayer costs and give workers a stake in containing future increases.
The City Council should join the Mayor in backing the pension reform bill that has been introduced by the Governor to adjust benefits for future employees.
Key Data
$625 million
— Projected savings beginning in 2012 from adopting a premium-sharing arrangement for health insurance.
$700 million
— Projected savings from requiring retirees under age 65 to pay 50 percent of their health insurance premium.
$250 million
— Projected savings from eliminating the Medicare Part B reimbursement for retirees over age 65.
$30 billion
— Total savings over the next 30 years from the proposed pension reform bill.
$4.8 billion
— Projected budget gap in fiscal year 2013.
New York City could save $1.4 billion in fiscal year 2012 by adopting the labor agreement template established between the State and the Civil Service Employees Association, which includes wage freezes, furloughs, and health insurance contributions. Implementing these measures would provide sufficient funds to prevent thousands of teacher layoffs and other municipal service cuts without relying on temporary fiscal gimmicks.
Recommendations related to Collective Bargaining
The City should extend the wage freeze to a third year to achieve savings in 2013.
The City should implement a five-day furlough for all municipal employees to save $400 million in 2012.
The City should require municipal employees to contribute to health insurance premiums at the same rates as CSEA employees.
The City should adopt the State’s long-standing policy for retiree health insurance premium-sharing to save $290 million in fiscal year 2012.
The City should avoid relying on one-shots like drawdowns from the Retiree Health Benefits Trust Fund or the Health Insurance Stabilization Fund to address budget pressures.
Key Data
$1.4 billion
— Potential savings for New York City in fiscal year 2012 by following the State's labor agreement template.
$400 million
— Savings from implementing a five-day furlough for all municipal employees in 2012.
$735 million
— Savings from requiring city employees to contribute to health insurance premiums at the same rates as CSEA employees.
$290 million
— Savings from adopting the State’s long-standing policy for retiree health insurance premium-sharing in fiscal year 2012.
$388 million
— Savings from extending the municipal wage freeze to a third year in 2013.
$3.8 billion
— Five-year savings if the State's contractual agreement is adopted by all State employees.
New York City's Health Insurance Premium Stabilization Fund, established through collective bargaining to cover health insurance costs for municipal employees, should not be used as a one-time budget fix to avoid layoffs and service cuts. Instead, the City and labor leaders should pursue structural reforms, such as implementing employee health insurance premium contributions, to address the underlying budget imbalance.
Recommendations related to Collective Bargaining
City and labor leaders should focus their cooperative efforts on meaningful reforms of health insurance instead.
The City’s elected and union leaders should seek large-scale savings that reduce the need for these tough choices in the future.
The City should implement cost sharing for health insurance premiums, following the example of State employees who contribute 10 percent of the premium for individual coverage and 25 percent for family coverage.
Key Data
$625 million
— Annual savings generated by implementing cost sharing for health insurance premiums, following the example of State employees.
$4.7 billion
— The projected budget gap for New York City for fiscal year 2013.
$500 million
— The amount accumulated in the Health Insurance Premium Stabilization Fund.
$1 billion
— Annual taxpayer contributions to the separate union welfare funds.
$30 million
— The initial amount of City funds used to establish the Health Insurance Premium Stabilization Fund.
$35 million
— The amount of future annual deposits agreed upon for the Health Insurance Premium Stabilization Fund.
New York City's budget has faced significant pressure since the 2008 recession, necessitating billions in spending cuts that have disproportionately impacted agencies like education and sanitation. Achieving further necessary savings in fringe benefits and pension contributions requires new collective bargaining agreements with unions and state legislative action.
Recommendations related to Collective Bargaining
Unions must be willing to accept changes in collective bargaining over health benefits to achieve larger savings in fringe benefits.
The City should pursue new initiatives to reduce pension fund contributions and health insurance premiums, which requires new collective bargaining agreements.
Key Data
$116 million
— The amount the 'All Other' category, which includes pension fund contributions and fringe benefits, was cut.
39 percent
— The share of the City's total City-funded spending comprised by the 'All Other' category, which includes debt service and pension fund contributions.
Public employee unions should agree to reduce compensation costs, such as through higher health insurance contributions or furloughs, to avoid the threat of 10,000 layoffs. Local governments must also reform pension and compensation structures, as labor costs account for 70% of their expenses.
Recommendations related to Collective Bargaining
Public employee unions should agree to reduce compensation costs so that many of them do not have to lose their jobs.
Alternatives to layoffs include having employees pay a higher percentage of health insurance costs, switching to less expensive health insurance plans, and lowering wages through furloughs or other mechanisms.
Localities need to make changes in pensions and compensation to address budget constraints.
Key Data
10,000
— threat of layoffs for state agency employees.
Rising municipal pension and benefit costs, which are subject to collective bargaining, have forced significant budget cuts to youth services and agency staffing. To address the fiscal crisis, the state must enact pension reforms for future workers and require union members to share more of the costs for health insurance premiums.
Recommendations related to Collective Bargaining
The state Legislature must enact a new pension system for future uniformed workers that includes a minimum retirement age, excludes overtime from pension calculations, and requires higher employee contributions, which are currently restricted by collective bargaining.
Union leaders must agree to more cost-sharing for health insurance premiums, as current compensation structures are subject to collective bargaining that limits the mayor's ability to reduce costs.
Retirees should be paying for a share of their benefits similar to arrangements in the private and nonprofit sectors, a change that requires negotiation within the framework of collective bargaining.
Key Data
$8.1 billion
— Projected annual pension fund contributions for fiscal year 2012.
$6.6 billion
— Total pension contributions cost to New York's taxpayers last year.
$1.2 billion
— Cost of retiree health insurance to New York taxpayers last year.
$4.9 billion
— Annual pension fund contributions in 2007.
$106,743
— Average compensation figure for city employees in 2008.
9,600
— Proposed reduction in teaching staff, representing 8% of the workforce.
Governor Paterson's plan to lay off 898 state workers and leave 1,102 positions vacant aims to address an $8 billion budget gap, though public employee unions are challenging the legality of these layoffs based on an existing memorandum of understanding. Rather than layoffs, the state could achieve similar savings by increasing employee premium sharing for family health insurance plans from 25 to 30 percent, which would save $79 million annually.
Recommendations related to Collective Bargaining
Reducing the cost of health insurance and retiree benefits is a preferable option to layoffs.
Increasing employee premium sharing for family health insurance plans from 25 to 30 percent would save $79 million annually.
Key Data
898
— Number of state workers Governor Paterson announced plans to lay off.
1,102
— Number of positions vacated by the end of the calendar year to go unfilled.
$8 billion
— Projected state budget gap for the new fiscal year beginning April 1, 2011.
$79 million
— Annual savings from increasing employee premium sharing for family health insurance plans from 25 to 30 percent.
The Metropolitan Transportation Authority should implement a policy to cover 50 percent of operating expenses through fare revenue to ensure fiscal stability. To achieve this target, expenditures must be constrained through aggressive collective bargaining to control wage and fringe benefit costs, alongside regular fare adjustments.
Recommendations related to Collective Bargaining
Growth in expenditures should be constrained through all available means including aggressive collective bargaining to limit wage and fringe benefit costs.
Key Data
39%
— The portion of operating expenses covered by fare revenue in 2009 based on the MTA's budgeted basis.
40%
— The projected portion of operating expenses covered by fare revenue in 2011 based on the MTA's budgeted basis.
33%
— The portion of operating expenses covered by fare revenue in 2009 based on generally accepted accounting principles (GAAP).
New York City's municipal union welfare funds receive $1 billion in annual taxpayer contributions, yet they suffer from poor management, lack of accountability, and inefficient benefit provision. Consolidating these supplementary health benefits into the city's existing health insurance program and centralizing non-health benefits could improve oversight and generate significant annual savings.
Recommendations related to Collective Bargaining
Consolidate supplementary health care benefits under the City's health insurance plan to replace the varying and inefficient package of drug, dental and optical benefits provided by the multiple welfare funds with a standard set of benefits included under the City's health insurance program.
Provide non-health-related benefits through a centralized cafeteria plan to enable individuals to select specific benefits with a limit on the dollar value, as 8 to 16 percent of the current welfare fund expenditures go toward non-health-related benefits.
Improve accountability for any remaining union welfare fund expenditures by setting standards for fund performance and management and expanding the Comptroller's authority to oversee and sanction funds that do not meet those standards.
Key Data
$1 billion
— Annual taxpayer contributions to municipal union welfare funds.
81
— Total number of municipal union welfare funds established by 58 municipal unions.
4 to 7 percent
— Average annual growth rate of payments to municipal union welfare funds.
$146 million
— Estimated annual savings from consolidating supplementary health care benefits under the City's health insurance plan.
69
— Number of funds that submitted late filings for fiscal year 2007.
48
— Number of the 70 analyzed funds cited for excessive administrative costs, high reserve levels, or signs of insolvency.
New York's proposal to defer pension contributions by amortizing payments over time creates a long-term financial burden, with estimated repayment costs of $5.8 billion exceeding the $4.5 billion in short-term savings. Furthermore, the continued legislative practice of adding costly "sweeteners" to public employee benefits exacerbates these fiscal challenges and should be discontinued in favor of sustainable, long-term savings strategies.
Recommendations related to Collective Bargaining
Efforts to please the labor unions with sweeteners should be foresworn.
More aggressive plans to provide permanent, long run savings should be developed.
The stretch proposal to amortize pension contributions should be avoided as it is a slippery slope.
Key Data
$4.5 billion
— Cumulative reductions in pension fund contributions over the six-year period from 2010-11 to 2015-16.
$5.8 billion
— Estimated cost to repay the deferred pension contributions.
$1.5 billion
— Reduction in total assets for State pension funds by fiscal year 2025-26 due to the amortization plan.
$1.7 billion
— Taxpayer contribution required to support New York State employee pensions in fiscal year 2010-11.
$3.2 billion
— Taxpayer contribution required to support New York State employee pensions in fiscal year 2013-14.
New York City faces significant fiscal pressure from rising pension and health insurance costs, which have grown substantially over the last decade. To address these challenges, the city should pursue collective bargaining reforms that align public employee benefits with private sector standards, including increased contributions to health insurance premiums and pension plan adjustments for new hires.
Recommendations related to Collective Bargaining
The Council should support the Mayor’s efforts to bargain with municipal labor unions for contributions to health insurance premiums.
The Council should lobby the State Legislature for pension reform to bring the system in line with private sector realities.
The Council should support reforming the pension package for new employees to require greater employee contributions and a longer vesting period.
The City should require health insurance contributions that are comparable to other public and private sector employers.
Key Data
$350 million
— Annual savings from the Mayor's proposed 10 percent co-payment for current and retired employees.
$1 billion
— Annual savings achievable by requiring employee contributions of 10 percent for individual coverage, 25 percent for dependents, and 50 percent for retirees.
815 percent
— Growth in pension costs between fiscal years 2000 and 2009.
15 percent
— Share of all City revenues currently taken up by pension costs.
$6.8 billion
— Current pension costs projected to grow to $8.1 billion by fiscal year 2014.
New York's public sector retirement benefits are significantly more generous than those in the private sector, creating a fiscal burden that necessitates a shift toward defined contribution plans. By moving benefit decisions into the collective bargaining process, the state could better align compensation with market realities and reduce the political influence of unions on pension enhancements.
Recommendations related to Collective Bargaining
The City and State should keep benefit terms confined to collective bargaining, thereby keeping the decisions about the level of benefits in the hands of those who pay for them.
The amount of employer contribution under a defined contribution plan should be subject to collective bargaining.
Chief executives should negotiate with their workers’ unions to implement changes to retiree health insurance benefits.
Key Data
$35.16
— Total compensation costs per hour among public employers in 2004, which was 47% higher than the $23.90 per hour for private sector compensation.
42%
— The amount by which public sector wages and salaries were higher than those in the private sector.
60%
— The amount by which public sector fringe benefits were higher than those in the private sector.
88%
— The percentage of state and local employees participating in a defined benefit plan, compared to 24% of private sector employees.
New York State faces a projected $12.4 billion budget gap by fiscal year 2013-14, driven largely by rising employee compensation costs that are expected to reach $22.2 billion. To address this, the state should implement structural reforms including a defined contribution pension option, increased employee health insurance premium contributions, and a wage freeze for public sector workers.
Recommendations related to Collective Bargaining
State employees should accept a wage freeze to forego the upcoming 4 percent increase.
The individual's share of the premium for single health insurance policies should increase from 10 to 20 percent.
The premium sharing for family health insurance policies should increase from 25 to 30 percent.
Premium sharing for retirees should be increased to 50 percent for both single and family policy holders.
The state should discontinue the practice of allowing retirees to buy down the future costs of health care premiums by applying unused sick days.
The state should end the reimbursement for the cost of Medicare Part B premiums.
A defined contribution option should be added to the pension system for all State employees.
Negotiations with public employee unions should include adding hours to the workweek to reduce needed staffing levels and overtime.
Key Data
$18.9 billion
— Total employee compensation in fiscal year 2009-10, including wages, salaries, and benefits.
$22.2 billion
— Projected total compensation for state employees in fiscal year 2013-14.
$45 billion
— Total payments required to compensate for pension assets lost from the stock market decline.
$56.3 billion
— Estimated unfunded liability of providing retiree health care for State employees.
$581 million
— Estimated fiscal benefits associated with proposed changes to health insurance premium sharing.
$194 million
— Estimated savings for the State from enrolling 10 percent of the workforce in a defined contribution pension plan.
Facing a $4.1 billion budget gap, the city must negotiate contract reforms with the United Federation of Teachers to address inefficiencies like the 'Absent Teacher Reserve' and seniority-based pay. These reforms include implementing merit-based compensation, expediting the termination of underperforming teachers, and eliminating the 'last in, first out' layoff policy.
Recommendations related to Collective Bargaining
The city should end compensation for teachers who aren't teaching, limiting pay to a six-month period while they search for a new job rather than carrying them indefinitely on the payroll.
The school system should implement quick termination for unsatisfactory teachers to avoid paying them for years while their cases are considered.
The city should use financial rewards to attract qualified teachers in hard-to-fill fields like special education, math, and science.
Merit pay should replace seniority rewards to ensure compensation is based on performance rather than tenure.
The city should kill the 'last in, first out' rule, which requires that the most recently hired teachers be laid off first regardless of their performance.
Key Data
$4.1 billion
— The size of the city budget gap necessitating spending reforms.
$100 million
— The annual outlay on teachers who are not currently teaching.
2 percent
— The maximum raise offered to city teachers in the next contract.
2,500
— The number of potential job cuts if contract negotiations do not result in savings.
1,400
— The number of teachers currently paid to be in the 'Absent Teacher Reserve'.
$74 million
— The annual cost of maintaining the 'Absent Teacher Reserve'.
New York City taxpayers spend $10.4 billion annually on pension and health-insurance benefits for municipal employees, a figure that significantly exceeds private-sector standards. Aligning these benefits with private-sector practices, such as requiring employee contributions to premiums and shifting to defined-contribution pension plans, could generate nearly $1.4 billion in annual savings.
Recommendations related to Collective Bargaining
The city should require its current workers to make contributions toward health-insurance premiums equal to the amounts paid by employees of local private-sector firms.
The city should require retirees to make contributions toward health-insurance premiums equal to the amounts paid by employees of local private-sector firms.
The city should be competitive with the private sector by converting to defined-contribution plans for future hires.
Key Data
$10.4 billion
— Total annual cost for pension and health-insurance benefits for current and retired municipal employees.
$1.4 billion
— Combined annual savings for health-insurance premiums if the city adopted private-sector contribution policies.
$628 million
— Annual savings if current workers contributed to health-insurance premiums equal to the amounts paid by employees of local private-sector firms.
$741 million
— Annual savings if retirees contributed to health-insurance premiums equal to the amounts paid by employees of local private-sector firms.
$6.7 billion
— Contributions to pension funds on behalf of current workers.
90 percent
— Percentage of surveyed private firms that offered a defined-contribution plan.
New York City's upcoming teachers' contract negotiations present a critical opportunity to address a $5 billion budget gap by implementing reforms to salary structures, pension benefits, and staffing practices. Key proposals include replacing seniority-based pay with merit-based rewards, ending indefinite salary payments for teachers not in classrooms, and streamlining disciplinary procedures for unsatisfactory performance.
Recommendations related to Collective Bargaining
Salary increases in the new contract should be funded with value-generating concessions.
Pension and health insurance reforms, including higher minimum retirement age and cost-sharing for premiums, should be implemented.
Merit pay should replace seniority rewards to better incentivize performance.
Financial rewards should be used to attract qualified teachers in shortage fields.
Compensation for teachers who are not teaching, such as those in the Absent Teacher Reserve, should end after six months.
The process for terminating unsatisfactory teachers should be greatly expedited by hiring more arbitrators.
Key Data
$655 million
— The annual cost of the Mayor's budget including funds for two 4 percent annual raises.
$285 million
— The annual savings from ending pay increases solely for seniority after ten years.
$74 million
— The annual cost of the 1,400 teachers paid to be in the Absent Teacher Reserve.
$60 million
— The annual cost to the City for teachers in rubber rooms waiting for cases to be heard.
$100 million
— The projected annual savings for the next 20 years from changes to pension benefits.
$125 million
— The savings from requiring retirees to pay half the health insurance premium.
Governor Paterson is urged to veto bill A4628, which prohibits school districts from reducing retiree health insurance benefits without approval from the local teachers union. This mandate restricts school districts' ability to manage rising costs and should be rejected to help lower local tax burdens.
Recommendations related to Collective Bargaining
Governor Paterson should veto A4628, a bill that would renew the provision prohibiting school districts from reducing retiree health insurance benefits without local teachers union approval.
State leaders should not stand in the way of school district managers that find ways to provide satisfactory benefits at reduced costs.
New York should, whenever the opportunity arises, roll back costly mandates that prevent local governments from managing expenses.
New York State's pension and health insurance costs are unsustainable, necessitating reforms to reduce the financial burden on taxpayers. These proposed changes include eliminating planned annual pay increases from recent collective bargaining agreements and requiring state employees to contribute more toward their health insurance premiums.
Recommendations related to Collective Bargaining
Eliminating one annual pay increase, typically averaging 3 percent, for state employees that was planned as part of recent collective bargaining agreements.
Requiring retired state employees to pay a larger share of their health insurance premiums.
Eliminating the inclusion of overtime pay in calculating the worker's salary base for pension benefits.
Increasing the minimum age requirement for most workers from 55 to 62.
Extending the employees' mandatory contribution beyond the first 10 years of service.
Mayors, county executives, school boards and other municipal managers need the state to give them tools to control labor costs.
Key Data
3 percent
— Average annual pay increase for state employees planned as part of recent collective bargaining agreements.
75 percent
— Portion of family health insurance premiums currently paid by the state for retired workers.
55 to 62
— Proposed increase in the minimum age requirement for most workers to receive pension benefits.
$25 million to $500 million
— Projected growth in annual savings for New York City if pension reforms are implemented.
10 years
— Current duration of mandatory employee contributions to pension funds.
New York City's average compensation cost for full-time employees reached $106,743, driven by a 63% increase in costs over eight years that significantly outpaced private and other government sectors. To address this, the city must pursue health-insurance reforms, implement a new pension tier for new hires, and return to productivity-based contract negotiations.
Recommendations related to Collective Bargaining
Mayor Bloomberg and the city's unions must partner to identify concessions and workplace reforms that would provide immediate and recurring savings, and the city should return to productivity-based negotiations in future contract talks.
The mayor should aggressively pursue health-insurance reforms to address the city's generous benefits.
The Legislature should approve a new pension tier for new employees as proposed by the mayor and the governor.
Key Data
$106,743
— Average compensation cost of full-time city employees in the last fiscal year.
$69,100
— Average pay per employee, including salary, overtime, and other pay differentials.
$37,600
— Average fringe-benefit costs per employee.
704%
— Growth in the city's average contribution for pension benefits over eight years.
63%
— Total compensation cost growth for New York City over the last eight years.
$200 million
— Savings from health-insurance restructuring included in the plan for the next fiscal year.
In order to promote fiscal reform, the Citizens Budget Commission (CBC) convened three separate agenda-setting conferences for key stakeholders in the state budget process in 2007. Each session focused on one aspect of fiscal reform with a goal of identifying specific changes for the coming budget cycle. The expectation is…
New York's Taylor Law governs collective bargaining for public employees, but the current dispute resolution process often leads to prolonged negotiations and fiscal uncertainty for local governments. Reforms are proposed to make the process more timely, mandate that arbitrators prioritize an employer's ability to pay, and encourage direct bargaining through models like 'last-best offer' negotiations.
Recommendations related to Collective Bargaining
The state should implement an automatic finding of an impasse if a settlement is not reached before a current contract expires to ensure a more timely dispute resolution process.
State law should mandate that the Public Employment Relations Board (PERB) weigh more heavily criteria such as ability to pay and past collective agreements when determining settlement awards.
Arbitrators should be required to award wage increases that do not necessitate tax increases or that are funded in part by productivity gains.
The state should consider adopting "last-best offer" negotiations to encourage vigorous bargaining and minimize the risk of an award that differs greatly from the parties' positions.
The state should consider bracketed negotiation, where an arbitrator's decision is binding only if it falls between the high and low offers submitted by the parties.
Key Data
14 percent
— Of 2,327 state and local contracts negotiated in New York in 2006-2007, 333 cases, or 14 percent, were brought before the Public Employment Relations Board (PERB).
5 percent
— Seventeen cases, or 5 percent, of labor disputes were handled through arbitration in fiscal year 2007.
24 percent
— In New York City, police, firefighters and district attorneys represent 24 percent of all local government employees.
54
— As of the beginning of the 2007-08 school year, 54 school districts in New York were at an impasse with their teacher unions.
70
— Since 1990, the average number of school districts starting the year at impasse is 70.
New York's local government labor costs are driven by state-mandated pension benefits that are largely outside the scope of collective bargaining, including generous retirement ages and benefit calculations. These state-imposed mandates, rather than local bargaining, result in pension arrangements that are significantly more costly than those found in the private sector or other states.
Key Data
1.5 million
— Number of people employed by local governments and school districts in New York.
74 percent
— Share of state and local government employees in other systems required to contribute more than 3 percent of their earnings toward pensions.
6 percent
— Share of full-time state and local government employees nationally who can count overtime in their pension formula.
$12,000
— Amount of annual variable supplement payments, or 'Christmas bonuses,' per retiree in New York City in 2007.
Public sector employees in New York City often receive higher wages and more generous retirement benefits than their private sector counterparts, with total public compensation averaging $35.16 per hour compared to $23.90 in the private sector. To address these rising costs and the political practice of bypassing collective bargaining to secure pension enhancements, the City should transition to defined contribution plans and restrict benefit negotiations to collective bargaining.
Recommendations related to Collective Bargaining
The City should keep benefit terms confined to collective bargaining, thereby keeping the decisions about the level of benefits in the hands of those who pay for them.
The City should convert from defined benefit to defined contribution plans to eliminate the political dynamic where unionized workers seek pension enhancements via the State Legislature when they fail in collective bargaining.
Key Data
$35.16
— Average hourly total compensation cost for public employers in 2004.
$23.90
— Average hourly total compensation cost for private-sector employers in 2004.
15 percent
— Average amount by which hourly earnings of state and local government employees in the greater New York City region exceed those of private-sector employees.
47-to-one
— Ratio of people passing the sanitation officer exam to average annual hires.
$3.2 billion
— City contribution to pension funds in fiscal year 2005.
$927 million
— City payments for health insurance for retirees in fiscal year 2005.
New York's public employee retirement benefits are currently set by state legislation rather than collective bargaining, creating a political dynamic where unions can bypass local officials to secure enhancements. The current system should be reformed to shift pension decisions into the collective bargaining process and transition toward defined contribution plans to ensure fiscal sustainability.
Recommendations related to Collective Bargaining
The City and State should keep benefit terms confined to collective bargaining, thereby keeping the decisions about the level of benefits in the hands of those who pay for them.
The amount of employer contribution in a defined contribution plan should be subject to collective bargaining.
The Mayor and Governor should negotiate health insurance changes with their workers’ unions.
Key Data
$35.16 per hour
— Average total compensation cost for public employers in 2004, which was 47% higher than the $23.90 per hour average for private sector compensation.
42 percent
— Amount by which public sector wages and salaries were higher than those in the private sector.
60 percent
— Amount by which public sector fringe benefits were higher than those in the private sector.
New York City's public school system faces significant inefficiencies in teacher deployment and compensation, where seniority-based pay and restrictive contract rules hinder effective instruction. Reforming these policies to prioritize performance-based pay, increase classroom instructional time, and grant principals greater managerial discretion is essential to providing a sound basic education.
Recommendations related to Collective Bargaining
Restructure the pay schedule to make a larger share of compensation conditioned on job performance and to de-emphasize longevity and graduate educational credits.
Use financial incentives to overcome shortages by offering differentials in the range of 20 to 25 percent for teachers qualified for and serving in specific titles deemed in a shortage condition.
Increase teacher time spent on classroom instruction by reducing combined preparation and administrative periods for junior high and high school teachers from 10 to five per week.
Enhance principals' managerial discretion by modifying seniority rules to allow principals to select teachers for given posts from among multiple candidates with the most seniority.
Key Data
$9,573
— Annual salary increase a teacher can receive under the current contract by earning graduate credits.
$32,659
— Annual salary increase a teacher can receive under the current contract due to longevity.
43 percent
— Percentage of teacher job titles deemed in shortage in the 1999-2000 school year.
4,250
— Equivalent number of teachers that could be added to the payroll by reallocating non-teaching time to classroom instruction.
13.9
— Number of pupils for each teacher in New York City public schools.
New York State faces a significant fiscal crisis requiring structural changes to labor agreements to enhance productivity and reduce long-term costs. Negotiations with major public employee unions should prioritize work rule modifications, such as increasing work hours and implementing a new pension tier, to preserve services while achieving necessary savings.
Recommendations related to Collective Bargaining
The goal of negotiations should be obtaining work rule and benefit changes that preserve service and save money.
State leaders should pursue increasing the hours for employees currently on a 37.5-hour workweek to 40 hours.
The State should consider adding a Tier V to the pension system with a reduced benefit package to help curb future pension obligations.
Key Data
128,000
— Number of employees represented by the Public Employees Federation and Civil Service Employees Association whose contracts expire in April 2003.
37.5
— Current workweek hours for certain state employees.
40
— Proposed workweek hours for certain state employees to enhance labor productivity.
New York City faces significant budget gaps that require structural changes to municipal operations, including renegotiating labor contracts to address rising fringe benefit costs and staffing inefficiencies. Implementing these reforms, particularly through collective bargaining, is essential to achieving long-term fiscal stability without relying on unsustainable borrowing or service cuts.
Recommendations related to Collective Bargaining
The City should adopt strategies to protect public safety in a time of declining resources by achieving necessary changes through collective bargaining with the police officers.
The Mayor should negotiate with the unions on fringe benefits to address the large looming budget gaps.
Citizens should reasonably expect some concessions from employees, particularly in their fringe benefits, to help address the large looming budget gaps.
The City should require all civilian employees to work a 40-hour week, which would result in savings to the City of $498 million annually.
Key Data
$251 million
— Total annual savings from three strategies for more rational staffing at the Police Department.
$67 million
— Estimated annual saving from rescheduling the police officers' work day.
$46 million
— Minimum annual savings from reassigning police officers from jobs better done by civilians to law enforcement duties.
$117 million
— Annual savings from stopping the use of officers on overtime to perform predictable duties.
$498 million
— Annual savings to the City from requiring all civilian employees to work a 40-hour week.
$4.2 billion
— Total cost to the City of employee fringe benefits in fiscal year 2001-02.
The City of New York could achieve approximately $498 million in annual savings by transitioning non-managerial civilian employees from a 35-hour to a 40-hour workweek, a standard practice in both the private sector and other public jurisdictions. This shift would allow for a reduction of over 8,000 positions while maintaining current service levels, and the report argues against "gain-sharing" wage increases given the City's severe fiscal constraints.
Recommendations related to Collective Bargaining
This report recommends that those civilians not working a 40-hour week be required to do so.
For those at the smaller locations, the shift to a 40-hour week should be accompanied by relocation to more concentrated offices or dividing time among two or more locations.
For these workers the shift to a 40-hour week should be accompanied by the sharing of work across agencies and combining tasks now limited to narrowly defined job descriptions, known as 'broad-banding.'
Peak-hour demand would be more efficiently met by increasing part-time staff during the peak periods.
The City could reasonably make proportional reductions in its subsidies to these agencies and thereby reap some savings for itself.
Key Data
$498 million
— Estimated annual savings to the City from moving all non-managerial civilian employees to a 40-hour workweek.
8,500
— Number of positions that could be eliminated if all non-managerial civilians worked a 40-hour week.
$58,000
— Average savings per worker including salary, fringe benefits, and space costs.
67,000
— Number of civilian workers currently in jobs scheduled for 35 hours per week.
1,556
— Number of different locations where civilian employees work.
80,000
— Total number of non-managerial civilian employees.
New York City faces significant fiscal risks due to unsettled collective bargaining agreements and a failure to secure productivity improvements in recent labor contracts. The city has prioritized short-term budget relief over long-term efficiency, notably dropping a major productivity initiative in an agreement with the Municipal Labor Committee.
Recommendations related to Collective Bargaining
The City should incorporate productivity improvements into its recent labor agreements to deliver more competitive services.
The City should avoid dropping major productivity initiatives in exchange for short-term budget relief when negotiating with the Municipal Labor Committee.
New York City's collective bargaining process for municipal employees requires reform to improve service quality and fiscal responsibility, as current practices like pattern bargaining and defined benefit pensions create inefficiencies and rising costs. By implementing performance-based pay, modernizing health insurance, and restructuring pension systems, the city could achieve significant net savings while better compensating workers in high-demand roles.
Recommendations related to Collective Bargaining
Set pay levels in response to labor market conditions, with shortage occupations receiving greater wage increases than those for which there are abundant applicants.
Change work processes in ways that lower the unit cost of services.
Shift the emphasis in pay scales from longevity to performance by adding a merit pay component to wages.
Modernize the health insurance program for municipal workers and retirees by incorporating changes already prevalent in the private sector.
Streamline the administration of fringe benefits provided through union welfare funds and share the savings in administrative costs with the workers.
Restructure the pension system for newly employed workers to provide a defined contribution rather than a defined benefit plan.
Key Data
$19.2 billion
— Compensation of workers in fiscal year 2000, representing half of all municipal expenditures.
$1.6 billion
— Additional cost of agreements that would increase wages at the projected rate of inflation in fiscal year 2004.
$1.4 billion
— Net savings to taxpayers from the Commission's recommendations in fiscal year 2004.
$798 million
— Recurring annual expenses for pension enhancements added in 2000 outside of collective bargaining.
$618 million
— Overtime cost in fiscal year 2000.
$150 million
— Cost of well-targeted, one-time catch-up raises for shortage occupations.
The report outlines strategies to enhance public education outcomes through the contract negotiations between the Board of Education and the United Federation of Teachers. It focuses on leveraging the collective bargaining process to implement improvements within the school system.
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