How will “Ability to Pay” and “Pattern Bargaining Impact UFT Contract Negotiations?

The Public Employee Relations Board, referred to by the acronym PERB is the state organization that sets the ground rules for union creation, union-management relations and collective bargaining. New York State is the most unionized state in the nation, especially public employees. There are thousands of public employee unions with hundreds of thousands of members. Seven hundred school districts across the state, 700 teacher unions; local, country, state, park and marine police, and on and on, all belong to unions, negotiate contracts, under guidelines set by PERB (See PERB website here) . Staff members of electeds in the Assembly and Senate are currently engaged in forming unions and getting recognition as the bargaining agents.

For decades unions fought for and finally achieved a key component of PERB rules, expired contracts remain in “full force and effect” until the successor contract is approved; as a result strikes are extremely rare.   Under PERB strikes are prohibited and if a union does strike the penalties are harsh, a fine of a days pay for each day on strike (2 for 1), suspension of tenure, substantial fines for the union as well as loss of dues check off for  a specific period of time. Any “concerted action” by union members, for example, a “sick out” is considered a strike.

If labor and management fail to reach an agreement, with approval of both sides, PERB will provide mediation, if mediation fails fact-finding, impasse and eventually non-binding arbitration, for uniformed services the arbitration is binding. PERB cannot force the parties to avail themselves of the processes, some disputes continue, unresolved, for years. (Read a recent award here)

The PBA, the NYC police union is in its sixth year without a contract, the arbitration/mediation process inches forward, see statement from PBA president here.

The mediation/fact-finding/arbitration process can take many months and while the final arbitration decision is not binding it is public and usually the basis of the final settlement.  The fact-finding process defines the bargaining positions of the parties, in the arbitration both parties introduce evidence and witnesses to buttress their positions, witnesses are cross examined, closing arguments, briefs, perhaps counter briefs, a lengthy process.

A long time ago I served on bargaining teams, at times a tortuous experience. Both sides exchange demands, yes, there are management demands as well as union demands. We actually sat across from each at the bargaining table “discussing” each demand. The common Department reply, “not a mandatory subject of collective bargaining,”  “a managerial prerogative.” occasionally, “can we write in contract language,” and, endless periods of time to caucus and discuss before the next session. A common disagreement was over “costing” a demand, does a union demand cost dollars?  The eventual agreement will be “percentages;” non-salary “cost” items reduce the actual salary settlement.  Class size is a cost item, for decades the UFT has been trying to limit class size, New York City class size is the highest in the state. For a few years in the 90s the City Council provided dollars to limit 9th grade class size in Math and English classes.  The new class size reduction law was a brilliant coup, in the waning hours of the session the Assembly and Senate bills were introduced, passed and an unelected governor, desperate for union endorsement signed.  Kudos!

As far as the dollar side of any collective bargaining agreement PERB uses “ability to pay” and “pattern bargaining,” as guides. Neither is clearly defined, does the pattern mean similar agreements among other city unions, among teachers unions within the region, teacher unions in comparable cities?  All of which have been part of negotiations over the years. “Ability to Pay” relates to the financial situation of the employer, does the fiscal situation of the employer allow for the increase, needless to say a contentious issue; teachers in Buffalo went without contract for decade, eventually negotiated a contract and once again is disputing an expired contract.

Almost every city union contract is expired and not surprisingly Adams chooses one of the weaker unions politically to settle with first.  The DC 37 agreement,

This tentative agreement on a five-year contract provides 3 percent annual raises for the first four years and 3.25 percent in the fifth year. The deal also includes a ratification bonus of $3,000 for employees active on the date the agreement is ratified. As part of this agreement, the city and DC 37 will also create a $70 million equity fund to support recruitment and retention.

A few weeks ago NYS Comptroller de Napoli, warned the City re upcoming budget gaps,

New York City’s $104.8 billion preliminary fiscal year (FY) 2024 budget has benefited from better-than-projected revenue collections, the reallocation of unused federal pandemic relief funds and savings initiatives, according to a report released today by State Comptroller Thomas P. DiNapoli. DiNapoli’s office assumes that a number of the fiscal risks the city currently faces will continue, increasing the planned budget gap to about $8.9 billion in FY 2025 and $13.9 billion in FY 2027 (18% of city-fund revenues), even when adjusting for stronger revenue collections.

“The city’s steps to close future budget gaps recognize the need to achieve long-term budgetary balance,” DiNapoli said. “It also recognized higher-than-expected revenue from tax collections and the remainder of federal pandemic relief aid. The city should continue to identify efficiencies, build up reserves and monitor its delivery of services amid staffing challenges. Significant risks remain in the city’s financial plan, although its recent agreement with its largest labor union has helped clarify the risk over collective bargaining costs. The city should be more transparent on its strategies to address future issues and inform taxpayers on budgetary decisions.”

The Citizens Budget Commission, a non-partisan fiscally conservative organizaton sees the DC 37 tentative settlement as “very reasonable,” with “great challenges” down the road.

“The tentative New York City-District Council 37 contract announced today provides raises that are very reasonable given recent and anticipated inflation. The great challenge, however, still is how the City will pay for them.

The City’s budget gaps currently grow from $3.2 billion in fiscal year 2025 to $6.5 billion in fiscal year 2027. Assuming this tentative agreement sets the pattern for all other unions, these raises would cost approximately $16.2 billion more than currently budgeted over the contract period. Finally, as the City negotiates other agreements and works to identify how best to adapt to remote work and flexible schedules, it should take great caution not to add economic costs to other contracts if remote work options vary.”

Is the path forward a DC 37 settlement for all, or, are there other pathways?

PERB regulations offer the mediation, fact-finding, impasse, arbitration pathway, time consuming without any guarantees of outcomes, the arbitration report is not binding and we can’t predict the economy, will the clouds part or storms arise?

The UFT could argue, as it has in the past, that the “pattern” should not be restricted to other city unions, the City is competing with suburban school districts to both attract and retain teachers. For the past decade teacher preparation programs have attracted fewer and fewer students. A July, 2022 national report paints a bleak picture of recruitment and retention of teachers; for prospective teachers, salary is at the top of the list. See the “Here Today, Gone Tomorrow” Report here. A key to recruiting and retaining “the best and brightest” workforce are salaries competitive with suburban school districts.

As far as “Ability to Pay” the nation is facing an uncertain economic future, economist Larry Summers is predicting a five year long recession  (Read here) while Nobel Prize winner Paul Krugman  sees the current inflation as “transitory.”  Will FED imposed rising interest rates resolve inflation and at the same time increase unemployment and push the nation into a recession, or, as Krugman suggests we will recover relatively quickly ( Read “Can We Really Have a Soft Landing?” here)

Can we argue that the DC 37 settlement is a baseline and if the city economy reaches specific data points additional salary increases will activate?

Back in the dim past I was one of the arbitration advocates at the UFT and was arguing a case with a monetary remedy. The arbitrator was urging us to settle; however, the Department was offering far less than my client thought was fair.  A light bulb clicked, I suggested we convert the full amount of money into CAR days, no check but over 100 CAR days in the teacher’s account. The teacher was leery, her husband, an accountant loved the idea. The CAR days would grow in value and the Department didn’t have to cut a check: everyone was happy.  A few years later I offered the same settlement, the Department said “absolutely not, totally inappropriate.”

Creativity one day, negativity the next, the contract negotiation process is incredibly complex, highly “political” (“What will the Post say? What will the NY Times say?”) Lindsay despised the union and agreed to Tier 1, Shanker agreed to loan the City money to prevent a default, Adams is already preparing his run for a second term, with opposition on the left and the right, I think of Robert Frost, “The Road Not Taken.”

Over the last weeks the UFT has run workshops in hundreds of schools to explain the negotiation process, and, the collect negotiating issues, in addition teachers are volunteering to serve on negotiation sub-committees and interact with the Department.

The UFT waited five years until Bloomberg was gone, and negotiated two reasonable contracts with a mayor they did not endorse, the PBA has waited six years for a mayor who they endorsed and was a PBA union member, so far, unsuccessful in negotiating a satisfactory contract.

My Ouija Board and Taro Cards have not been helpful.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s