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labor For de Blasio, Contract Talks Offer Problem

New York City Mayor-elect Bill de Blasio and municipal unions have a major problem. After going 4 years without a contract under Mayor Bloomberg the question of a new contract and how much retroactive pay is included is front and center for the incoming Mayor and the municipal unions.

Mayor Michael R. Bloomberg has promised all sorts of assistance to ease Bill de Blasio’s transition, but the mayor has nonetheless bequeathed one particularly thorny, potentially explosive issue to his successor: New York City’s 300,000 municipal workers are angry that their contracts expired years ago, and they are demanding more than $7 billion in retroactive pay to make up for their years without a regular raise

It could prove devilishly difficult for Mr. de Blasio — long a favorite of the city’s unions — to deliver even a small part of what labor leaders are demanding because the city faces an anticipated $2 billion deficit next year. This poses a quandary for Mr. de Blasio, fiscal experts say — if he gives billions in retroactive pay to the unions, that means he might have to cut spending on schools, the police or parks, or face a harder time financing his cherished plans for universal prekindergarten.

When Mr. Bloomberg was pushing for low — or no — wage increases in union negotiations several years ago, labor leaders walked away from the bargaining, convinced that they would get a better deal from whoever was elected the next mayor. But now it appears that the union chiefs may have miscalculated, because after years without a contract, they are asking Mr. de Blasio for a large amount of retroactive wage increases that he simply may not be able to pay.

“The municipal unions made a decision that they would rather wait for the next mayor than try to resolve their contracts with Mayor Bloomberg,” said Carol Kellermann, president of the Citizens Budget Commission, a business-backed fiscal watchdog. “O.K., now they have their new mayor. They’re asking him for a lot of money, no matter how you slice it, but nobody thinks that amount of money is available.”

Mr. de Blasio faces a huge challenge, she said, because of the workers’ pent-up frustrations as well as the logistical ordeal of negotiating agreements with the city’s 152 bargaining units, all of them with expired contracts.

The United Federation of Teachers, which has been without a contract since 2009, asserts its members are owed the same 4 percent raises that other municipal unions received back in 2008. That would translate into more than $3 billion in retroactive pay, while the Patrolmen’s Benevolent Association, which represents 23,000 police officers, is seeking $500 million in back pay.

“There has to be retroactive pay,” said Harry Nespoli, the president of the Uniformed Sanitationmen’s Association and chairman of the Municipal Labor Committee, the umbrella group for municipal unions. “We’ve been working too long without a contract. Our members have had to use credit cards to pay their bills.”

A top de Blasio aide declined to comment, saying the mayor-elect would not negotiate in the news media. During his campaign, Mr. de Blasio expressed an openness to some degree of back pay for workers, but said full retroactive raises would not be possible.

“There’s no way in the world to pay out the full amount — that’s estimated as much as $7 to $8 billion, and that’s impossible to find,” Mr. de Blasio said in the campaign’s final debate, on Oct. 30. He added, “If they want to talk about retroactive pay, that’s their right, but they have to show us the cost savings to go with it.”

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Mr. Bloomberg, the Citizens Budget Commission and others see retroactive pay as a luxury, an unnecessary bonus the city can ill afford. They maintain that the city’s workers already make a good living even without raises in recent years. And they point out that some city workers, most notably teachers, have continued to get annual step raises to recognize their increased seniority, so their actual take-home pay has increased. A deputy mayor, Caswell F. Holloway IV, also argued that municipal workers should be grateful that Mr. Bloomberg, unlike many other mayors, avoided sizable layoffs, even during the worst recession since the Great Depression.

But municipal workers complain that they have gone two, three, four years without raises, causing their salaries to fall behind inflation, and they argue that the city has a moral obligation to compensate them for the years without a raise.

It is no secret that the unions look forward to dealing with Mr. de Blasio instead of Mr. Bloomberg. “The city just finished another banner year with a major surplus, and when it comes to what the mayor says about the teachers’ union and how he treats the workers of New York City, I find him to be disgusting,” said Michael Mulgrew, president of the teachers’ union.

But Joshua B. Freeman, a labor historian at City University of New York, said Mr. de Blasio was less beholden to municipal unions than many might think. In the Democratic primary for mayor, the only municipal union that endorsed him was the one representing City University professors. The largest municipal union, District Council 37, endorsed the mayoral candidacy of the city comptroller, John C. Liu, while the teachers backed the candidacy of a former comptroller, William C. Thompson Jr. Mr. de Blasio had the coveted endorsement of 1199/SEIU, the giant health care union, but that union does not represent city workers.

“One thing the new mayor has going for him is almost no municipal unions back him until after the primary,” Mr. Freeman said. “That might give him a little latitude.”

Mr. de Blasio also might benefit, Mr. Freeman said, because the mayor-elect has been a longtime friend of labor, giving him more credibility when he argues that the financial cupboard is bare.

“The union leadership are grown-ups; they understand he can’t give them everything they want,” Mr. Freeman said. “On the other hand, they expect things to be different than under Bloomberg.”

The Bloomberg administration notes that the city’s labor costs have climbed even while the unions have not received regular raises. Administration officials say the city’s contributions to its pension funds have soared to $8.2 billion this year, from $1.5 billion in 2002, while its health care outlays rose to $6.3 billion, from $2.7 billion. And every percentage point raise for the city’s 300,000 municipal workers costs about $300 million.

Labor leaders assert that there is plenty of money for retroactive pay because of what they say are past budget surpluses and larger-than-anticipated tax revenues. The Bloomberg administration disputes that. “The notion that there isn’t a deficit or there aren’t gaps in the budgets — those are real problems,” Mr. Holloway said. “There’s no magic hidden pot of money.”

Mr. Nespoli said that the municipal unions did not cut off bargaining with Mr. Bloomberg in the hope of getting a better deal from his successor. He said the mayor made a take-it-or-leave it offer for a multiyear pay freeze while asking workers to pay more for health coverage.

“They said they couldn’t offer more than that,” he said. “All the unions said that’s not negotiating.”

Mr. Holloway disagreed, saying that even when the unions had objections to the city’s proposals, “there was no willingness to negotiate or make a counteroffer.”

David L. Gregory, executive director of the Center for Labor and Employment Law at St. John’s University School of Law, predicted that Mr. de Blasio would agree to some retroactive pay, although perhaps not a full loaf. “I don’t think anyone expects it to be paid in a one-time payment over the next couple of months,” he said. “It will probably be part of some innovative, multiyear arrangement.”

Thomas Kaplan contributed reporting.