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PEP Feb 2004
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Public Employee Press

Budget battles begin

  State and city budget proposals

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By DIANE S. WILLIAMS

By the time Gov. George E. Pataki and Mayor Michael R. Bloomberg announced their state and city budget proposals in January, DC 37 had begun working closely with political allies and coalitions to protect union jobs and public services.

The governor’s proposed $99.8 billion budget for fiscal year 2004-05, which begins April 1, projects a $5.1 billion revenue shortfall. It counts on continuing the sales tax on clothing and raising taxes on nursing homes and hospital bills to bring more than $700 million into state coffers. The governor proposed Medicaid cuts that would provide some cost relief for New York City but could reduce funding for the city’s Health and Hospitals Corp.

The mayor’s $45.7 billion plan for FY 2004-05 includes a $2 billion gap, which he would close with half of the current year’s $1.4 billion surplus, $300 million in federal aid, $400 million in state gap-closing aid, and a half-billion dollar reduction in long-term debt. FY 2004-05 begins July 1 for the city. The city plan would eliminate the clothing tax in June. Mr. Bloomberg did not call for labor concessions to balance the budget, but in negotiations he is insisting on concessions to finance a contract settlement.

No layoffs are called for in the mayor’s proposal, but the Police, Fire, Sanitation and Corrections departments would reduce civilian positions, and cuts affecting libraries and cultural institutions are of concern to union members. Social Services, Homeless Services, Health and the Administration for Children’s Services would replace temporary services contracts with more than 1,200 civil service jobs.

“When Mayor Bloomberg announced his doomsday budget proposals for 2003-04, DC 37 worked successfully with state legislators and City Council members to enhance funding for the city and minimize the damage extreme cuts and layoffs would have caused,” said DC 37 Executive Director Lillian Roberts. “Our strategy will be similar this year.”

While the union will look to political allies in Albany and the City Council to provide adequate funding for public services and jobs, both Republican leaders were careful to show a softer side by not calling for tax hikes. This move suggests a concern that raising taxes in an election year would harm them politically and threaten President Bush’s chances in November.

DC 37 will approach this year’s budget as it has in previous years, understanding that proposed spending plans are subject to negotiations before they are finalized.

Coalitions for action

DC 37 is partnered with the City Council in the Fair Share Campaign for equitable federal and state aid for New York City, backing the Campaign for Fiscal Equity in the effort to get adequate state financing for city schools, and working with the Better Choice Campaign on state funding issues. The goals include:

  • Obtaining more federal and state aid for homeland security, Medicare, and worker training.
  • Increasing state and city education funding and improving state aid formulas.
  • Improving federal and state funding for health care, including Medicare, Family Health Plus, Child Health Plus and Elderly Pharmaceutical Insurance Coverage (EPIC)

The union will also press legislators to close tax loopholes for corporations and increase corporate accountability by ending pension fund raids and executives’ golden parachutes, which come too often at the expense of employees and investors.

While the state budget proposal would retool funding formulas for public education, health care and Medicaid, it was blurry on details and timing.

The court-imposed mandate to increase education funding for New York City is being interpreted one way by Republican legislators, who are holding out for delivering just a plan this year, and another way by Democrats, who are aiming to include the much needed money.

The infusion of resources could provide more books, labs, and after school programs for the city’s 1.1 million public school children.

The union believes a new school aid formula could provide increased job security for members employed by agencies like the School Construction Authority and the Dept. of Education.

Effect on contract
DC 37 sees the governor’s plan for Medicaid reform as potentially affecting members. The current state formula for
reimbursing hospitals that care for the uninsured may be recalculated and could change Medicaid eligibility requirements. Potentially, more patients could be moved into Health Care Plus programs, a downward step in care. The reduced services could adversely impact the city’s Health and Hospitals Corp.

“Last year DC 37 helped gain $2.1 billion in aid and revenue for the city, averting 10,000 layoffs,” Ms. Roberts said. This year, although the mayor’s budget does not include layoffs or increased taxes, Ms. Roberts said: “The budget process will play a role in the success or failure of our efforts to secure a fair and equitable contract for DC 37 members.”

 


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