NEW YORK (AP) — The city will seek bids within days for its multibillion-dollar health insurance contracts, Mayor Michael Bloomberg said Tuesday, invoking other cities’ fiscal struggles as he deepened his stance in a standoff with unions.
In a speech on economic issues, the mayor again drew the hard line he has taken on labor issues in recent years and outlined a challenge for whoever succeeds him in January.
Detroit’s recent bankruptcy and Chicago’s layoffs of more than 2,000 school staffers, he said, illustrate the potential consequences of not trimming government health care and pension costs.
“We may be a long way from Detroit,” he said, touting New York’s rebound from the 2008 financial crisis and efforts to make its economy less dependent on Wall Street. “But we are only a short ways from relapsing into decline if we allow health care and pension benefits to crowd out the investments that make New York City a place where people want to live, work, study and visit.”
Teachers, jail officers and many other city employees have been working with expired contracts, some for several years. Many workers haven’t gotten cost-of-living raises since the contracts lapsed, although some get pay boosts reflecting longevity or acquiring new credentials.
Bloomberg’s administration has said it would reach contracts if workers pay more for health insurance and forgo back raises, which he says the city can’t afford.
Union leaders have said Bloomberg is spurning workers, and they’ve noted that the city has ended recent budget years with surpluses. Some mayoral candidates say he’s leaving an expensive problem for the next mayor.
Bloomberg acknowledged Tuesday that the issue would extend beyond his term, but he argued his successor would have “enormous leverage” to win concessions from unions eager to try for new contracts with a new mayor.
“The question is: Will the next mayor continue to hold the line — or capitulate?” the Democrat-turned-Republican-turned-independent mayor said during his speech at a former Brooklyn pharmaceutical plant that’s now a business incubator.
The leader of one major city union, United Federation of Teachers President Michael Mulgrew, called Bloomberg’s remarks “self-congratulatory speechmaking.” The UFT and other big city workers’ unions have endorsed various Democratic candidates.
Bloomberg wants more city employees to contribute to their health insurance premiums — currently, about 5 percent do, he said. The coming request for proposals from insurance companies will aim to save up to $400 million a year on insurance costs that have doubled since 2002, to $6.3 billion this year.
The Municipal Labor Committee, an umbrella group of about 100 city employee unions, wants to make sure the quality of workers’ benefits doesn’t suffer in the drive for savings, chairman Harry Nespoli said by phone.
“We don’t want to rush into it,” added Nespoli, who also leads the city sanitation workers’ union.
Bloomberg also wants changes to a pension system that now costs the city more than $8 billion a year, compared with $1.4 billion in 2002.
He suggested that city workers have a choice between a traditional, “defined benefit” pension and what’s known as a “defined contribution” plan, such as a 401(k). Traditional pensions usually cost employers more.
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