As part of a new cost-cutting deal with the city’s largest civilian union, the de Blasio administration has agreed to back an early-retirement incentive state bill that could apply to 75,000 municipal workers, including thousands of teachers.
The measure pending in Albany would offer up to three years’ added pension credit to workers who are at least 55 years old and have logged 25 years of service.
Government officials privately predict the move would save the cash-strapped city an estimated $900 million over the next four years, including $250 million the first year, according to a union source familiar with the proposal.
The savings are expected to be generated by replacing veteran workers with junior staffers who make less money or by leaving the positions vacant until the city’s pandemic-wracked finances improve.
City officials expect only about 10% — or 7,500 — of the eligible employees to file for early retirement if the legislation is passed in Albany, said the union official, who asked to remain anonymous. Health workers and some employees whose jobs produce revenue could be shut out.
“Early retirement incentives have the potential to save hundreds of millions in revenue and in doing so prevent public worker layoffs and our city’s financial health,” said State Sen. Andrew Gounardes (D-Brooklyn), who introduced the measure in his chamber — and is being challenged by Republican Vito Bruno in Tuesday’s election.
Mayor’s Letter of Support
The de Blasio administration has submitted a letter to top state lawmakers supporting the measure, according to Henry Garrido, executive director of District Council 37, which represents about 150,000 city workers.
The legislation, carried in the Assembly by Peter Abbate (D-Brooklyn), would include city workers who are enrolled in the New York City Employees’ Retirement System, the city’s Teachers’ Retirement System and the Board of Education Retirement System.
Nurses and EMTs could be excluded from the early-retirement opportunity if their position is “deemed critical to the maintenance of public health and safety,” according to the bill.
“This is a concern,” Garrido said. “I understand why, but it is not fair. Many are completely burned out by COVID-19.”
The bill could also permit city officials to make exceptions for jobs that generate revenue, like traffic enforcement agents, building inspectors and tax assessors.
“We’re supporting an [early retirement bill],” city Labor Commissioner Renee Campion told The Chief-Leader last week, declining to elaborate. She did not respond to requests for comment by THE CITY.
Garrido said the city could avoid staffing shortages by “backfilling” some critical positions. That would entail hiring younger workers at lower pay to replace veteran employees who earn more money and are entitled to better pensions under state law.
But that may present a challenge for difficult-to-staff positions like teachers and ventilator specialists, which are in high demand. The city Department of Education has repeatedly refused to publicly disclose how many teachers it is still trying to hire to fill gaps created by the hybrid online and in-person instruction system.
The legislation lays out some projections: The average participant is expected to be 60.8 years old, with 26.3 years of experience and a $91,000 salary.
Layoffs Delayed
DC 37 officials last week agreed to defer city payments to its health-and-welfare and education funds until late next year. In return, the city has promised no layoffs for a year, and possibly until July 2022 if more federal aid is forthcoming.
The city is facing an estimated $9 billion tax shortfall this year and another, possibly larger, hole next year, according to the Independent Budget Office.
On Aug. 31, de Blasio told reporters that early retirement “is something we have to put into play.”
Later that same day, he told NY1’s Errol Louis on “Inside City Hall” that “early retirement won’t be enough” to fix the budget. “Not by a long shot.”
Several major city unions seeking to avoid layoffs have agreed to defer either future wage increases or money earmarked for their health benefit funds to generate savings.
The proposed legislation doesn’t apply to city firefighters and cops, who are already allowed to retire after only 20 years on the job, with no age restrictions.
The city has used early retirement before to generate savings, most recently in 2010, when a statewide incentive cut $681 million over two years.
“In times of fiscal stress, measures like this have helped local governments maintain services even as they reduced spending,” Michael Mulgrew, president of the United Federation of Teachers, said in a statement.