The budget outlook is becoming
bleaker, according to Michael Musuraca of the DC 37 Research and
Negotiations Dept. at the Sept. 17 Council-wide Bargaining Caucus
meeting.
The city received permission of fiscal monitors to borrow $2 billion
to help close a budget gap in the current fiscal year. But it won't
have that option next year, Mr. Musuraca said, when it faces a protected
deficit of $5 billion.
Tax cuts instituted by former Mayor Rudolph W. Giuliani created
75 percent of the anticipated budget gap, Mr. Musuraca said. The
city's revenue base is also hurt by the recession, rising unemployment
and job losses related to 9/11, Mr. Musuraca said.
Besides being hit with falling revenue, the city must also cope
with rising Medicaid costs, greater debt service and higher pension
expenditures, said Mr. Musuraca. "We are probably entering
a period of slow economic growth, which means the city is not going
to be able to grow itself out of its budget problem," Mr. Musuraca
said.
Associate Director Evelyn Seinfeld of the DC 37 Research and Negotiations
Dept. said the average annual wage increase negotiated this year
was 3.1 percent in New York and 4 percent in the United States.
The pay of DC 37 members rose by 37.75 percent-or 1.75 percent above
inflation-over the course of the last four economic agreements (from
Oct. 1, 1990 to June 30, 2002). With welfare fund increases, the
total compensation rose 39 percent, or 3 percent above inflation,
said Mr. Musuraca.
Tens of thousands of members received an extra 3 percent take-home
pay because the union won legislation that allowed people with 10
years in pension tiers 3 and 4 to stop contributing to their pensions.
Significantly, union members continue to enjoy a defined benefit
(guaranteed) pension and fully covered basic individual and family
health insurance, and the workweek hasn't increased, Mr. Musuraca
pointed out as he reviewed the economic picture for coming negotiations.
By contrast, in the private sector, employers are increasingly refusing
to provide health coverage. Less than half of all private sector
workers are covered by traditional pensions, and more middle- and
low-income families are now depending on two incomes to get by.
—G.N.H.