With negotiations to start Dec. 4, mayor asks $600 million in labor productivity savings. Union says civilianize, eliminate waste and cut contracting-out to protect jobs and services.

Mayor Michael R. Bloomberg outlined an austere financial plan on Nov. 14 to close an estimated $1.1 billion budget gap in the current fiscal year and another projected $6.4 billion shortfall next year.

His proposal would raise property taxes, restore a commuter tax, cut services and require concessions from the municipal unions.

The centerpiece of Mr. Bloomberg's plan is raising the property tax by 25 percent and restructuring the personal income tax to require commuters to pay city taxes.

The new commuter tax would be about six times higher than the previous, tiny 0.45 percent tax. Eventually, the plan would reduce personal income taxes for city residents, partially offsetting the increase in the property tax, according to the Bloomberg administration.

DC 37 detailed savings plan

Restoring a commuter tax was one of the key proposals DC 37 made in a white paper released earlier this year by Executive Director Lillian Roberts.

The union recommended $600 million in savings and revenue through restoring the tax, replacing uniformed employees in non-enforcement duties with civilians, reducing privatization and contracting out and eliminating waste.

"We are determined to work with the administration to help it address the city's budget problems," said DC 37 Executive Director Lillian Roberts. "The mayor's tax proposals show that he realizes that he cannot take an ax to municipal services to address the shortfall without severely crippling local government and undermining services.

"But this is only the beginning of the budget process. We are on guard to make sure that union members do not become the scapegoats as the city gets its fiscal house in order in the upcoming months."

The administration hopes to close the budget gaps in 2003 and 2004 through, among other things, $3.4 billion in property tax increases, $1 billion in commuter taxes, $1.8 billion in agency spending reductions and fee increases, as well as labor concessions and increases in state and federal assistance
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The property tax is the only tax the city can increase without the approval of the state Legislature.

Mr. Bloomberg wants to implement the increase quickly to boost revenues in the current fiscal year, thereby reducing the financial strain on next year's budget. Adopting the increase now would also signal that the city is ready to do what it can to repair its own house before seeking help from the state.

Mr. Bloomberg outlined deep budget cuts—totaling $1.95 billion—this year and next year. The reductions include cutting the police force by 2,000 positions and eliminating eight fire stations, 2,500 day-care slots and 32 senior centers.
The November plan would eliminate 8,000 municipal jobs by June through the already-implemented retirement incentive, attrition and a hiring freeze.

Mr. Bloomberg is also asking for $600 million in productivity savings from city employees in next year's budget. He says possible methods include extending the workweek from 35 hours to 37 1/2 hours, requiring city workers to contribute to their health-care premiums and containing pension costs. The $600 million would come on top of the $270 million in labor savings achieved earlier this year by stretching out the time for the city to make certain pension contributions.

Without such productivity savings, up to 12,000 layoffs could become necessary, said the mayor's proposal. Contract talks open Dec. 4.

Ms. Roberts said that she expected that the municipal unions would deal with the administration's various proposals on labor savings as they launch a new round of bargaining talks on future economic agreements. The opening meeting for bargaining is set for Dec. 4.

"We are going to fight hard to preserve our benefits and win a fair and equitable increase for our members," Ms. Roberts said.

"This should be possible if, among other things, the city is successful in enhancing revenues, reducing government waste and cutting contracting out."

—Gregory N. Heires