De Blasio Defends Budget Plan After Criticism Over Labor Expense

New York Mayor Bill de Blasio defended his $74 billion budget after city Comptroller Scott Stringer said it lacks a true estimate of labor costs and relied on a tax on the rich that may not win state approval.

“What we’re doing is the right approach given the great uncertainties we’re facing,” de Blasio said today at a news conference. “We have uncertainties in terms of the federal government, in terms of the state government and with 152 open labor contracts, the most any mayor has ever faced.”

Stringer, the city’s chief financial officer, who ran on the same Democratic ticket as de Blasio, said Feb. 19 that the mayor’s first preliminary budget didn’t accurately account for personnel costs and relied on taxes that need legislative approval. The budget, which the City Council must approve, assumes yearly municipal wage increases of only 1 percent through 2018, far less than unions seek.

De Blasio, 52, the first Democrat to run the municipality in 20 years, won election by the largest margin by a non-incumbent in city history after promising to reduce the gap between rich and poor and to resolve the longstanding contract disputes. New York, the most populous city in the U.S., has a budget bigger than every U.S. state apart from California, New York and Texas.

Funding Raises

De Blasio’s Feb. 12 budget presentation didn’t include a way to pay for agreements with the more than 150 unions whose contracts expired years ago, an expense Stringer said would total “multi-billions of dollars.” He called on de Blasio to settle the disputes by the July 1 start of the 2015 fiscal year.

“Our municipal workers have worked too long without a settlement and our taxpayers need to know the true state of our city’s fiscal situation,” Stringer said. “Neither is possible without knowing the extent of this liability and how it will be funded.”

Ronnie Lowenstein, director of the Independent Budget Office, a non-partisan public monitor of city finances, has said she didn’t expect de Blasio’s budget to include an amount that he’s set aside for raises because doing so would give away the city’s negotiating position.

De Blasio has said he is seeking to persuade Albany lawmakers and Governor Andrew Cuomo to allow the City Council to enact a 0.5 percent surcharge on incomes above $500,000 to provide $532 million for universal all-day pre-kindergarten and after-school for teens. The governor has said the state should pay to provide such services statewide.

De Blasio said today he hoped to secure agreements with all unions by Dec. 31.

“One hundred fifty two contracts paints a very complex dynamic, so I’ve never said that we could guarantee a timeline,” he said.

To contact the reporter on this story: Henry Goldman in New York at hgoldman@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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