NYC’s De Blasio to Seek Union Cost Savings, Official Says

New York Mayor Bill de Blasio, who got elected with labor support, may ask unions for concessions on health care if they want raises when negotiating to renew expired contracts, Budget Director Dean Fuleihan said.

In testimony to city council’s Finance Committee today, Fuleihan said New York would collect at least $1.5 billion more revenue over the next 18 months than budget officials predicted in November. Labor negotiations may produce an agreement that exceeds that amount, he said.

“The workforce will be treated with respect they very much deserve as we enter into discussions with the unions,” Fuleihan said. “At the same time, we have to be careful and we have to be considerate of the taxpayers and the affordability of this. And there have to be some offsetting costs.”

De Blasio, 52, a former council member and the first Democrat to run the most-populous U.S. municipality in 20 years, won election by the largest margin by a non-incumbent in city history. He promised to reduce the gap between rich and poor and to resolve the longstanding contract disputes, which Comptroller Scott Stringer estimated last month could cost “multiple billions of dollars.”

Fuleihan said the mayor would seek to trim health-care costs or change work rules to achieve savings to help defray the cost of raises for the 300,000 workers, though he declined to be specific. He said it was too early to determine the scope of such deals.

Waiting Game

The unprecedented situation the new mayor faced when he assumed office Jan. 1 was expired contracts with each of the city’s 152 unions. Labor leaders had quit talks with the administration of Mayor Michael Bloomberg, which insisted upon workers contributing more to pensions and health insurance. The former mayor is the founder and majority owner of Bloomberg News parent company Bloomberg LP.

The unions decided to wait out Bloomberg’s third term and hope for a better deal from his successor, a self-described progressive, after concluding that the Bloomberg administration “really sent the message out that they didn’t want to do a deal,” said Harry Nespoli, chairman of the Municipal Labor Committee, an umbrella group, in an interview last month.

Fuleihan’s estimate of unanticipated revenue was topped by the Independent Budget Office, a city agency chartered to review finances, which told the council it expects New York’s surplus to exceed $2 billion through the next fiscal year.

The city’s $74 billion budget exceeds every U.S. state apart from California, New York and Texas.

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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