Mayor Bill de Blasio said on Thursday he reached a "landmark" deal with the public school teachers union that not only promises about $4 billion in retroactive pay and raises but also sets a precedent for the almost 150 municipal unions waiting to negotiate their own deals with the city.
"This is a huge breakthrough for the people of New York City," he said at a City Hall announcement. "This agreement will be a gateway to great progress in our school system and that's the most important fact here today."
The nine-year pact lasts until October 2018. Over that time, the 110,000 members of the United Federation of Teachers will see an 18 percent increase in salaries. The retroactive deal stretches back to 2009, the last time the teachers had a contract.
According to a joint statement, the union and the mayor said cost savings in health care — including more efficient purchasing of health care services — would yield more than $1 billion over the next four years, pending approval of the Municipal Labor Committee. The committee negotiates basic health benefits on behalf of all municipal unions and is looking at the teachers' deal as a possible template for other labor contracts.
De Blasio said he was hopeful the committee would approve the deal: "I think at this point there is a lot of respect for this proposal at the MLC, but we'll wait for them to take their vote."
This deal may be the first of many facing de Blasio but it comes with its own history. After being witness to the openly hostile relationship between teachers and the former Mayor Michael Bloomberg, de Blasio said he sought a new tone.
"The last five years engendered such frustration, a logjam that seemed intractable and so wrong and so unnecessary, with so much rancor," the mayor said. "I know the members of the UFT deeply wanted to move past so that they could get on with the work that they do."
UFT President Michael Mulgrew agreed, even hugging Schools Chancellor Carmen Fariña to demonstrate the new relationship.
"Teachers and the educators of New York City have gone a long time without getting any proper respect. That changed with the changing of the administration," Mulgrew said.
The mayor also touted the finances of the deal, saying it could be fully funded within the city's current budget framework, without a tax increase. De Blasio said he will provide more details in the executive budget he's putting out in the next week.
The mayor said the teachers are getting back pay in the form of a pair of 4 percent raises for the contract negotiations that fell apart in 2010.
According to the Independent Budget Office, that money — almost $3.4 billion — will be spread out over the next five years. Budget watchdogs consider that a big relief, compared to doing it in one lump sum.
James Parrott of the Fiscal Policy Institute, a nonprofit think tank that gets some funding from labor groups, said Mayor de Blasio has socked away enough pots of money to cover those costs in the budget he has already presented.
"You have reserve cushions all around in the case that any bumps or things come along, so that's sort of how the city budget is right now," he said.
As for the raises going forward, Parrott said former Mayor Bloomberg set aside enough money to cover 7.5 percent raises for the entire city workforce, including teachers. However, this new contract calls for 10 percent raises for teachers.
Parrott said the city could make up the difference with the $1 billion in health care savings included in the new contract.
IBO spokesman Doug Turetsky said the 10 percent raises, while reasonable, may still require some budgetary trade offs. Budget watchers say a 10 percent raise could set a precedent for other unions whose contracts expired under Mayor Bloomberg and have yet to be renewed.
One labor expert, Immanuel Ness of Brooklyn College, said he was impressed with how fast the de Blasio administration resolved the negotiations, given the years of limbo on Bloomberg's watch.
However, the Patrolmen's Benevolent Association, which represents police officers, announced Thursday that it will use a mediator for its contract negotiations with the city.
City Council Speaker Melissa Mark-Viverito applauded the deal as a good start to tackling the expired labor contracts facing City Hall.
"The expired labor contracts are a serious issue facing our city and I commend Mayor de Blasio, Chancellor Fariña and the administration for being willing to tackle such a difficult task while also respecting and valuing our workers,” she said in a written statement.