Mayor de Blasio during a budget presentation (photo: Benjamin Kanter/Mayoral Photo Office)
As the New York City economy continues to struggle from the effects of the coronavirus pandemic and additional fiscal aid from the federal government is nowhere in sight, Mayor Bill de Blasio’s administration has begun formulating plans for taking the last resort step of laying off thousands of municipal workers.
The coronavirus fallout drained the city’s coffers, forcing the passage of an $88.2 billion budget for the 2021 fiscal year, a massive $6 billion reduction in planned spending that included using billions of reserves. But the city’s budget gap of more than $9 billion far eclipsed that spending cut and despite measures to find savings in city operations, the administration has yet to cover a $1 billion gap it pegged to labor savings.
As he continues to lobby for federal aid and, short of that, state authority for the city to borrow to cover expenses, the mayor promised that if neither of those sources come through soon, the final $1 billion to balance this fiscal year’s budget would come from labor costs. This could possibly happen through negotiations with unions that are ongoing, but failing that the city will move to layoffs. De Blasio has repeatedly said it could be as many as 22,000 municipal workers, about 6.7% of the city’s 325,614 full time and full-time equivalent employees.
The mayor has till October 1 to present a plan for that $1 billion to the State Financial Control Board, which oversees the city’s fiscal management. But citywide labor agreements require the city to provide municipal unions with 30 days notice about possible layoffs, meaning the administration effectively has till the end of this month -- just two weeks -- to announce which agencies will be terminating workers and how many.
This past week, the de Blasio administration gave city agencies specific targets to meet to find more savings, including through layoffs, and to provide those plans by the end of this week; Friday, August 21. A mayoral spokesperson said workers would be notified by August 31 if they are being considered for layoffs beginning October 1.
Those plans may not necessarily be put into effect, as the city continues to await federal aid and is also continuing to seek long-term borrowing authority from the state Legislature and Governor Andrew Cuomo, who has expressed skepticism about such borrowing and sits atop the Financial Control Board. Negotiations over the latest federal stimulus package have stalled, though, and legislators in Albany have expressed reluctance to allow the city to borrow billions of dollars to cover expenses that would increase the city’s debt and take decades to repay.
De Blasio bemoaned the “painfully real” layoffs that the city may have to undertake, as he explained at his daily news briefing on Wednesday. “We all hoped and prayed there'd be a stimulus – that appears to be dead now. We're going to Albany to ask for appropriate long-term borrowing capacity that would stave off the layoffs. If we don't have that, we're going to keep working with labor, looking for every solution, every kind of savings. But if we don't have something else that stops it, we do plan 22,000 layoffs on October 1st. It's a massive, painful number. It resembles the kind of things we had to do decades ago, but the job here is to try and avert it if we can.”
It’s unclear yet how the layoffs may affect how the city provides services, though there would undoubtedly be a major impact considering the scope. Some services like garbage pick-up have already seen cuts from the new city budget that went into effect July 1. The city workforce is the largest it has ever been, having increased by about 31,200 workers since de Blasio took office, owing to a booming economy, ample revenues, and a Democratic mayor and City Council who believe in readily expanding the size and scope of government.
If the mayor were to follow a similar logic as former Mayor Michael Bloomberg did after the 2008-09 recession, public safety and revenue-generating functions of city government would be less affected, if not immune from layoffs. Public health services are also unlikely to be targeted for major cuts, considering the pandemic is far from over.
Politico New York reported last week that the NYPD had not been asked to lay off any workers, though the mayor denied then appeared to confirm that on Thursday. “Every agency will have to come up with savings,” he said when asked whether he was indeed keeping NYPD personnel held harmless. After saying “no” he then backed up and zoomed out. “Now, look, savings can take more forms than just layoffs,” he continued. “That is a true statement, but to get to the kinds of savings we're talking about here, layoffs, unfortunately have to be part of the package in some form or another.”
On August 10, city agencies were provided with detailed layoff guidelines that will determine how they go about letting go of their workers. If layoffs do occur, the first to go will have to be provisional workers, those city employees who are waiting to take civil service exams that would give them permanent positions. Unlike permanent workers, provisionals can be fired regardless of seniority since their termination is not determined by Civil Service Law or by contractual agreements.
There were 14,841 provisional workers in city government as of July 31, making up about 4.5% of the city’s full time and full time equivalent workforce, according to the Department of Citywide Administrative Services.
The Citizens Budget Commission, a nonprofit fiscal watchdog, has emphasized that the city could bring its budget into balance without resorting to layoffs or long-term borrowing. But the group’s aptly named “Hard Choices Framework” would require making difficult decisions that would significantly reduce spending, reduce the worker headcount through attrition, require temporary tax increases (for instance, a temporary property tax increase, though CBC warns of the risks of increased taxes on the city’s competitiveness) and, notably, necessitate collaborating with labor unions to identify significant savings – through, for example, workers beginning to pay a small premium for their health insurance.
“Layoffs aren't necessary,” said Ana Champeny, CBC’s director of city studies. “There are other reductions that could be made, and the city should be more aggressively reducing headcount through attrition.”
As the city’s own guidelines acknowledge, the layoff process will be complex. According to a copy of the guidelines obtained by Gotham Gazette, the city will create a Layoff Task Force once it determines that layoffs will be necessary. The Office of Labor Relations will then give the 30-days notice to unions, listing the titles, number of people, and names of those identified for layoffs.
The guidelines also stress that agencies should “analyze the impact of layoffs on members of protected groups,” and consider whether eliminating or reducing certain positions in competitive jobs could negatively affect older workers and racial, ethnic, or gender diversity of the workforce.
Senior employees with certain civil service titles slated to be laid off could choose to “bump” a junior employee, taking a step down the ladder but retaining employment. A higher level worker could take over the duties of a lower level worker who is laid off, but “the reverse situation can be problematic,” the guidelines say. Firing entry-level workers would help avoid those situations, but wouldn’t create the same level of savings as firing someone higher up with a larger salary.
The administration has also instructed agencies to bear in mind how layoffs will affect the work they do. “Part of what they're asking agencies to do is not just identify people, but identify or evaluate how that will affect service provision,” said Doug Turetsky, chief of staff at the New York City Independent Budget Office, a nonpartisan city agency.
Though Turetsky said the impact of layoffs is hard to gauge without knowing the specific targets that city agencies have been given, he did cite the Department of Parks and Recreation as an example of how those effects could play out. “We already know from reductions in the 2021 budget that it seems, at least anecdotally, to be having some effect on park maintenance and upkeep,” he said. “So it’s only likely to be some more.”
As Turetsky noted, “We have this moment...more city workers than ever before. But at the same time, there's no shortage of requests from New Yorkers for even more services.”
Unions have also warned against the effects of firing those very workers who have kept the city going during this crisis. “Throughout this pandemic city employees, our frontline heroes, have put their lives on the line to provide essential services,” said Henry Garrido, executive director of DC 37, the city’s largest union of public employees, in a public statement on Wednesday. “The threat of 22,000 layoffs is not a way to repay them for their heroic acts. Layoffs should be an absolute last resort. We need the Federal government to step up and fund the frontlines, we need the State to step up and allow the City to borrow, and we need the City to protect essential workers.”