May 2 (Bloomberg) -- New York Mayor Bill de Blasio and the city teachers union hailed as historic a nine-year contract that includes two years of retroactive pay and raises that may set a pattern for pacts with all 300,000 municipal workers.
The agreement applies to 110,000 members of the United Federation of Teachers who missed out on 4 percent raises that other city unions got in 2009 and 2010. It also provides pay increases ranging from 1 percent to 3 percent over the next four years. The teachers have been without a contract since 2009.
“We have reached a landmark agreement for our school teachers, but first and foremost a landmark agreement for our children,” said de Blasio, a 52-year-old Democrat who took office Jan. 1.
He announced the pact yesterday at a City Hall news briefing, a week before he’s due to present a final $75 billion budget for the fiscal year starting July 1. The New York City public-school system is the largest in the U.S., with about 1.1 million students in more than 1,700 schools.
New York’s cost would be as high as $4 billion through 2018, not including at least $1 billion in reduced health care costs that de Blasio promised would come with efficiencies, without specifying how savings would be realized. He didn’t say how much more the retroactive increases would cost as their payments are spread out over two more years ending in 2020. The mayor said the city has the money within its budget framework to cover it.
The agreement may offer a road map for resolving an unprecedented situation in which all municipal employees -- teachers, police, firefighters, sanitation workers and civil servants -- worked for several years under expired contracts.
“Anytime you’re getting retroactive payments, it’s pretty important,” said Harry Nespoli, chairman of the Municipal Labor Committee, a coalition of all the public-worker unions, who’s also president of the Uniform Sanitationmen’s Association. “It proves this administration is willing to sit down and negotiate, and I’m definitely very happy about it.”
He said he would have to study the agreement to determine whether it could provide a basis for bargaining with other unions.
The deal contains provisions for more parent-teacher communication, greater compensation and responsibility for teachers who succeed, and more effective disciplinary procedures for misconduct. It would also address the issue of how to use the “Absent Teacher Reserve,” those educators not assigned to classrooms due to school closings or other reasons, he said.
After providing retroactive pay for 2009 and 2010, the proposal grants a 10 percentage-point increase from May 2013 through Oct. 31, 2018, almost a year after the 2017 mayoral election, amounting to a more than 18 percent pay raise over the contract’s nine years, de Blasio said.
The deal offers 1 percent pay increments from May 2013 through May 2015, which would rise to 1.5 percent in 2016; 2.5 percent in 2017; and 3 percent in May 2018. It also would include a one-time $1,000 ratification payment.
Under the current contract, teachers’ pay starts at $45,530 for those with a bachelor’s degree and no prior teaching experience, and $51,425 for those with a master’s degree. Someone with 7.5 years teaching experience may start at $74,796. The current contract has provided annual salary boosts and additional money for post-graduate coursework to a maximum of $100,049 per year.
The new deal would include rules that would allow the city’s Department of Education to remove poor-performing teachers from the Absent Teacher Reserve pool. It also creates new positions to reward effective teachers with three stepped categories that give them mentoring responsibilities and increased yearly compensation ranging from $7,000 to $20,000 a year.
The union also agreed to modifications in its health plan that de Blasio said would save $1 billion by removing individuals not entitled to services and through centralized drug purchases, a process the administration says could save $3.4 billion through May 2020 when extended to all city workers.
New York has the money to pay for a citywide labor settlement based on the pattern set with the teachers, even though de Blasio didn’t label the money as such in a preliminary spending plan he presented in February, according to the city’s Independent Budget Office, a non-partisan public fiscal monitor, and the city Comptroller’s office.
A citywide 1 percent salary raise costs more than $300 million, and spending plans drafted by former Mayor Michael Bloomberg in November and de Blasio in February each reserved more than $300 million to cover 1.25 percent raises for fiscal years 2014 and 2015.
Funds are available to cover the increased payroll obligation, according to analyses conducted by the IBO and James Parrott, a UFT consultant who is also chief labor economist for the nonprofit Fiscal Policy Institute, a research group. Funds include an unspent $1.4 billion in a retiree health trust; $1 billion in unspent agency appropriations; at least $800 million in unanticipated revenue; and more than $500 million in a line-item called “prior year payables.”
“The city has the money to take care of the retroactive pay for the teachers and the other unions,” Parrott said today in an interview.
The UFT and city negotiators opened talks soon after de Blasio took office after winning election in a landslide. The mayor, a self-described progressive, faced a situation in which all 152 municipal contracts had expired in years of unfruitful negotiations between labor organizations and Bloomberg.
Bloomberg, founder and majority owner of Bloomberg News parent Bloomberg LP, had insisted that city workers contribute more to offset rising health insurance and pension costs, and he rejected union demands for back pay covering years worked under expired contracts.
UFT President Michael Mulgrew entered negotiations arguing that city teachers’ pay had fallen behind salaries and benefits paid to educators in suburban school districts, which he said contributed to higher to turnover. Since 2002, starting salaries for teachers have increased 43 percent, according to the Education Department.
“I call this a contract for education,” he said yesterday. “There were some tough issues that had to be dealt with. The mayor, true to his word, said all of the challenges this city faces we can solve just by bringing people together.”
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