The head of New York City’s teacher union is frustrated that improving pension benefits for public employees isn’t a higher priority in state budget talks. And now he’s telling lawmakers: Vote against the budget if it doesn’t include what he wants.
United Federation of Teachers President Michael Mulgrew’s threat comes as unions struggle to stay on the same page with exactly what changes they want to the Tier VI pension law, which was passed in 2012. Supporters say better pension benefits are needed to recruit and retain public sector workers, including teachers and health aides.
But unions, which wield major influence in Albany, have proposed different changes — and a price tag on the effort has been elusive. The protracted negotiations are another reason why lawmakers are preparing for Gov. Kathy Hochul and the Legislature to blow through the April 1 deadline for a budget agreement for the 10th year in a row.
“We are not dealing with what the normal paradigms are. We have to come up with something creative because you made a big mistake 14 years ago,” Mulgrew said. “If we don't have the significant fixes in Tier VI, then vote the budget down.”
Mulgrew plans to travel to Albany again this week as the budget negotiations go down to the wire. Fiscal watchdogs say the cost of any changes will fall to local governments throughout New York.
The UFT and other teacher unions are focused on lowering the age when someone can retire without a penalty. Under Tier IV, public employees including teachers can retire at 55 if they’ve worked for 30 years. Under Tier VI, an employee must work until 63 in order to retire without losing half of their pension award.
Opponents say there’s scant evidence that pensions are contributing to recruitment and retention challenges. Tier VI required employees hired after its 2012 enactment to contribute to the cost of their retirement for the duration of their employment, instead of just the first 10 years. It also set a later retirement age — all measures that are saving state and local governments an estimated $80 billion through 2042.
Various unions were pushing for different types of tweaks to Tier VI and had vied publicly and privately for their own priorities. While Hochul and leaders of the state Assembly and Senate say they want to “Fix Tier VI,” a concrete proposal and cost have yet to emerge.
“I think there’s a lot of noise around it right now,” said Chris Koetzle, executive director of the Association of Towns, which is tracking the issue and nervous about its potential costs. “I don’t think there’s any clear consensus.”
Unions representing uniformed workers wanted changes to the way overtime is capped in setting final pension awards. Unions representing office and clerical workers sought relief in the percentage of pay that employees are required to contribute — which under Tier VI ranges from 3% to 6%, depending on income.
A bill to decrease these individual contribution rates, updated earlier this month, would increase the cost that towns, cities, school districts and the state need to pay by around $500 million a year.
“Most of the costs of paying these benefits are going to come from local governments, from towns, from school districts and the city of New York,” said Ana Champeny, vice president for research at the Citizens Budget Commission, a fiscal watchdog.
The higher contributions required by government employers could eventually raise local taxes, where revenue comes from property taxes rather than income taxes. “Wall Street going gangbusters is not going to help Buffalo pay these increased bills,” Champeny said.
New York State AFL-CIO President Mario Cilento has stepped in as a peacemaker. Unions have agreed that any resolution must include elements of each bucket, so as not to favor one group of public workers over another, lawmakers said.
State Sen. Jessica Ramos, a Queens Democrat who chairs the chamber’s labor committee, said getting unions into alignment is a necessary first step.
“The unions have been working very hard to unify their interests into one bill,” said Ramos, who supports rolling back Tier VI. “This is about equity. Tier VI is something that should have never been done.”
Cilento and state Budget Director Blake Washington engaged in direct talks last week in hopes of hashing out a proposal to bring to Hochul and lawmakers.
Washington’s spokesperson declined to comment. Cilento said in a statement that he is “working closely with the governor and the Legislature to develop solutions that address these mounting fiscal pressures and restore fairness for the public servants who deliver the services all New Yorkers rely on."
The UFT last week amplified Mulgrew’s exhortation to vote down the budget with a “social swarm” calling it a “pass/fail assignment.” Posts were seen by hundreds of thousands of people in several days, a UFT spokesperson said. Mulgrew is expected to be in Albany on Monday and Tuesday.
Lawmakers, particularly Democrats, said they were sympathetic to the call. But they said debate around proposals to change the rules for auto insurance payouts and scale back the state’s climate laws are taking precedence.
“All of those are priorities that the governor has kind of put on the table,” said Assemblymember Harry Bronson, a Rochester Democrat. “Tier VI hasn't really gotten to the level of intense discussion.”
