In his high-stakes contract talks with city unions, Mayor de Blasio is pressing for healthcare savings in exchange for pay raises, the mayor’s budget director told the City Council on Wednesday.
“We’re going to treat the workforce with the respect that they have not been treated with, but at the same time protect the taxpayers and do something that’s affordable,” Dean Fuleihan said at the first hearing on de Blasio’s proposed $74 billion budget.
“There have to be offsetting savings. And (de Blasio) specifically mentioned and has repeatedly mentioned health savings.”
All 300,000 city employees have been working under expired labor contracts, some for more than five years. The unions are demanding more than $7 billion in retroactive pay hikes.
Fuleihan repeatedly stressed that saving money on the skyrocketing cost of health benefits would have to be part of any deal with the unions.
Health insurance for workers and retirees costs the city about $6 billion a year – and is projected to reach almost $7 billion by 2016 and nearly $8 billion by 2018.
“We need to find ways to control costs while providing high quality health care to our employees,” Fuleihan said. He refused to discuss specifics.
Some have advocated requiring workers – the vast majority of whom pay nothing for their health care – to contribute to their own insurance costs.
For every $1 that city employees contribute each week toward the health care, the city would save $15.6 million a year.
The Citizens Budget Commission has estimated that the city could save $1.8 billion a year by requiring single employees to pay 10% of their insurance premiums, employees with families to pay 25% of their premiums, and early retirees to pay 50% of their premiums.
Other options could include setting up clinics that could provide primary care more cheaply to city employees, and giving workers incentives to get preventive care that could ultimately drive down the cost of treating them when they get sick.
“We’re looking to sit down and see if we can come up with some ideas that can save everybody money,” said Harry Nespoli of the Municipal Labor Committee.
But he said he would resist making workers pay more for premiums, noting they already are responsible for co-pays.
“That’s going to be a problem. … We want to make sure that whatever changes, the quality of the health care stays the same.”
Fuleihan tried to portray a tight fiscal situation – even as budget watchdogs said the city has more money than the mayor has let on.
The IBO said Wednesday the city will receive $300 million more in revenue this budget year and $1 billion more next year beyond the mayor’s projections.
The IBO said the current budget year will end June 30 with a $2 billion surplus, $244 million more than de Blasio estimated. The IBO forecast a surplus of $1.2 billion in the next budget year, while the mayor has forecast no surplus.
“The higher collections are largely driven by our expectation of more local job growth,” said IBO Director Ronnie Lowenstein. “We expect higher profits for many New York City-based firms.”
Separately, Controller Scott Stringer projected the city would bring in $860 million more in taxes next year than de Blasio expects, running a $510 million surplus.
But Fuleihan insisted the lower estimates are right. “At this point I wouldn’t change the revenue projection,” he said.
