Even as Mayor de Blasio spoke Jan. 14 of reducing city headcount by 5,000 and seeking additional savings from municipal unions, a bill championed by several labor leaders to offer an early-retirement incentive has lost momentum because of the city's success in gaining wage and fringe-benefit deferrals in return for no-layoff clauses that generally run through June 30.
"Previously, we had told New Yorkers that we had lost $9 billion in revenue between Fiscal Years '20 and '21...as a result of COVID," he said. "Unfortunately, as we now look into Fiscal '22, we can update that number and tell you the revenue loss from COVID will be at least $10.5 billion, a staggering number."
Could Face State Cuts
Mr. de Blasio said there was also a "hidden danger" of "massive potential state cuts" if hoped-for Federal aid doesn't materialize.
He said that a sharp drop in property-tax revenues and soaring costs related to the coronavirus had deepened the city's fiscal straits.
Last summer, the Mayor warned that he might have to lay off 22,000 workers without direct aid from Washington or state approval of an additional $5 billion in the city's borrowing capacity.
But once the unions cooperated by furnishing $776 million so far of a requested $1 billion in savings through the deferrals of pay and benefit increases from the current fiscal year into the one that begins July 1, the city was able to get by using attrition and a partial hiring freeze rather than layoffs.
In the current fiscal year, the Mayor cut 7,000 positions and found $1.3 billion in agency savings. He said any additional hirings agencies make will have to be paid for by eliminating three other job lines.
"Our workforce is beginning to shrink," he said. "They have to have three lines lost to attrition to be able to hire the one new."
Mr. de Blasio added, "There are obviously exceptions, for example, in the health-care field."
According to Assemblyman Peter Abbate, chair of the Committee of Government Employees, the deals cut by Mr. de Blasio with unions that included no-layoff clauses put his bill to encourage early retirement for city workers on the back burner.
Saying that President Biden's election and Democrats gaining a slim majority in the U.S. Senate also eased the pressure to make layoffs, Mr. Abbate said, "I am not getting the phone calls I was before."
He plans to reintroduce the bill in the new legislative session so it can be a ready option in the event if the city had impose layoffs "if things don't come through in Washington."
3-Year Pension Credit
The union-backed bill offered a retirement incentive of up to three years' additional pension credit to tens of thousands of civil servants who were at least 55 and had 25 years of service or were otherwise eligible to retire.
Mr. Abbate noted that there were budgetary implications under the bill that partly offset the savings on salaries if workers retired. In addition to the pension costs, he noted, those retiring "got vacation, sick time so that some people will walk away with $10,000 to $15,000 the city has to give them right away."
While union leaders' sense of urgency for that bill has generally faded, Joe Puleo, president of District Council 37 Local 983, said, "It's the number one question we are getting from our members every day. A lot of people were going to retire but now want to hold off and see what happens. And there are those situations where one spouse is eligible to go now, but the other only able to go with the legislation."
He estimated 300 of his 3,500 members would be eligible for the early-retirement incentive if it were approved.
Schumer: FEMA to Help
The city got some immediate budget help when new U.S. Senate Majority Leader Chuck Schumer told the Mayor that the Biden Administration had pledged that the Federal Emergency Management Agency would fully reimburse the city for covered expenses related to the pandemic.
"Throughout this whole painful crisis, the City of New York has had to cover 25 percent of all FEMA eligible expenses; FEMA eventually provided the other 75 percent," Mr. de Blasio told reporters. Having FEMA retroactively cover the entire amount, he said, was "going to mean about a billion dollars for New York City."
Noting the city "constantly pressed the Trump Administration for full reimbursement but "couldn't get anywhere," the Mayor added, "The fact that it happened immediately, even before Joe Biden walked in the door, is amazing."
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