The Streets Were Paved with Gold (28 page)

Teachers are granted paid sabbaticals.
The Board of Education unilaterally rescinded sabbaticals early in the fiscal crisis, but an arbitrator ruled that this was in violation of the teachers’ union contract. The sabbatical policy once offered 70 percent pay for 1 year off after 14 years’ teaching. Today, after 7 years, all teachers receive 6 months off at 60 percent of salary. In February 1978, 1,225 teachers won this benefit. The cost, according to the Board’s Personnel Director, Frank Arricale, was $3 million (which does not include the cost of substitute teachers).

Secretaries who work in schools and are members of the teachers’ union also receive paid sabbaticals.
For the winter-spring 1978 semester, 45 secretaries were off on sabbaticals.

T
HE PUBLIC PAYS
for these work rules in two ways. They impede productivity—reducing the delivery of city services. As we’ve seen, the Koch administration estimated, for instance, that if all city employees worked a forty-hour week—as federal or California state employees do—taxpayers would potentially receive 20 million extra hours of service. The public also pays because these work practices cost money.

But that’s not all the public pays for. According to the Temporary Commission on City Finances, in 1976 the average annual cost of employee fringe benefits (including leave benefits) was $4,640—almost three times the average cost of other municipalities and private corporations. Municipal union consultant Jack Bigel disputes this conclusion, contending that health insurance benefits are more generous in three or four other cities and that, unlike New York, other governments often provide cost-of-living escalators in their pension plans. Comparative pay and benefit analysis among
governments is primitive—the Urban Institute, in 1978, was in the process of wrestling with this monster. The nonpartisan Congressional Budget Office has said city wages were “not particularly out of line” but “what little reliable evidence there is seems to indicate that New York City provides its employees with considerably more in the way of fringe benefits—pensions, health insurance, etc.—than is offered the employees of other large cities.”

In New York’s Wonderland, almost $2 is spent on pensions, leave and fringe benefits for every $3 spent on salaries. These benefits include:

Pensions: After debt service, pension benefits are the largest nonservice delivery item in the city’s budget ($1.2 billion in fiscal 1979).
Taxpayers contribute approximately 90 percent of the total cost of funding these pensions, which offer half-pay retirement after a specified period to all city employees. Workers were supposed to contribute 25 to 33 percent of the cost, but as seen in
Chapter 2
, special legislation (ITHP) increased the city’s share while pension underfunding reduced the employees’ share. Some city employees contribute less than others—transit employees hired prior to 1976 contribute nothing. Most public and private retirement plans compute retirement benefits as a percentage of the retiree’s 3 to 5 highest paid years. New York does it differently, allowing employees to retire on their final year’s pay—leading to overtime abuses and quickie promotions. One of management’s contract demands—rejected by the Transport Workers Union in their 1978 negotiations with the Transit Authority—would have limited retirements to 120 percent of pay. New York also excuses retirees from paying city and state income taxes on their pensions. However, not all retirees have it so good. Approximately 3,000 widows of police and fire officers subsist on frozen pensions of $106.66 a month—less than $1,300 a year. Unlike many cities and states, New York does not have cost-of-living escalators built into its pensions.

Social Security: Like other employers, the city pays half the cost of its employees’ Social Security contribution ($234 million in fiscal 1979).

Health Insurance: The city pays the full cost of health and hospital insurance for each employee and his or her family ($183 million in fiscal 1978).
Health insurance coverage is also extended to all retirees and their families, including retirees in their forties who hold other jobs. Unlike New York, the federal and most state governments require employees to contribute half the cost.

Welfare funds: The city supplements health costs with what are called “union welfare funds” ($127 million in fiscal 1978).
These are solely administered by the unions, though the city pays the full costs. Among the benefits offered: free prescription drugs, free eyeglasses and dental care for all employees and their families, free legal services, free psychiatric counseling, education and “training” reimbursement, free tax and pension counseling. Partial welfare benefits are granted to part-time employees after 6 months. The city pays between $350 and $420 per full-time employee, yet these funds are called “union welfare funds.” Workers often come to believe the benefit is provided by their union, not the city.

A special annuity retirement fund is provided all uniformed employees, transit workers, and teachers (about $36 million).
Beginning with sanitation men in 1967, the city agreed that for each day the employee was on the payroll—including vacation, sick leave and paid holidays up to a maximum of 261 days a year—the city would pay $1 to an interest-bearing account. When the sanitation worker retires, he can draw regular annuity payments or collect one lump sum payment of principal and interest. The sanitation union’s annuity booklet advertised that a worker, after 30 years, could receive $30,750. Once sanitation workers captured this benefit, all other uniformed employees demanded and won it. In 1970—an election year—the governor and state legislature gave it to teachers. Annuity benefits extend to chiefs as well as indians, and are not always limited to $261. Certain police officials, for instance, receive more, as do teachers with at least 8 years’ service (who get $400 annually) and many transit workers (who receive $500 annually).

Though Gracie Mansion is provided as a free residence, a mayor’s pension base includes the $30,000 “cost” of the Mansion.
This practice, begun years ago, allows a mayor to peg his pension to $90,000 rather than the $60,000 salary. When he retired in 1978, Mayor Beame was eligible for a $76,000-a-year pension. Over the years, he chose to contribute less, so his annual pension is $55,000.

Police and firemen are eligible for special tax-free pensions under the so-called “Heart Bill” (about $17 million).
First passed by the state legislature in 1970, and annually since, this bill presumes that any heart disability is work-related, allowing retirement at three-quarters of the final year’s salary. As an added bonus, this pension is tax-free. And one need not be disabled to receive it. The Police Department’s Chief Inspector, George McManus, got a $28,465 tax-free disability pension when he retired in 1971 (he
currently earns $25,000 as an executive with the National Auto Theft Bureau). Chief of Detectives Albert Seedman retired with a tax-free $25,904 pension (he currently earns $35,000 as vice president for security of Alexander’s department stores). Police Commissioner Michael Codd, who left office on the final day of the Beame administration, applied for a $46,000 disability pension—$493 less than his salary. “I am suffering far greater physical limitations that I did four years ago,” he told the
Daily News
, explaining that doctors discovered his heart problem when he was admitted to a hospital in September 1977. That’s odd, since at the time the Commissioner said his problems were due to “exhaustion.” (After it became a public issue, the Police Pension Board turned down Codd’s request.)

Special tax-free disability pensions are available for all city workers.
An “ordinary” disability pension is available to any city worker who is the victim of a non-work-related injury—getting hit in the head with a golf ball, for instance. Those with less than 10 years’ city service can retire on one-third pay; those with more than 10 years receive half pay. A “line-of-duty” injury entitles the worker to a three-quarter pay pension. Again, one need not be disabled to qualify. August Gary Muhrcke, claiming a back injury, retired from the fire department 4 years ago. He receives a tax-free $11,822.04 pension. Yet his “disability” did not prevent him from winning the First Annual Empire State Building Runup—covering 85 flights of stairs in 12 minutes, 32 seconds. Commissioner John T. O’Hagan energetically ran the Fire Department for 5 years. Upon retiring in early 1978, he claimed a “hearing loss” disability and requested a $41,000 disability pension. (Like Codd, he was turned down.) Since 1970, according to the
News
, 55 percent of all retired police officials with the rank of captain or above received disability pensions.

Police, firemen, teachers and professors at the vast City University receive what is called “longevity” pay.
Police, firemen and corrections officers get a bonus of $100 every five years. Teachers receive a bonus of $750 after 10 years and another $750 after 15.
^*

Certain city employees receive what are called “pay increments.”
These are automatic promotions, divorced from performance. Teachers, for example, receive two $500 increments a year, for a
total of 16 over 8 years. These cost $10 million annually. (They were increased in 1978). Like other employees, they also receive cost-of-living increases of almost $1,200 annually. All uniformed employees, including sanitation men, also receive yearly increments. Police and firemen receive an increment of $2,443 after the first year, an additional $675 after the second year and $671 after the third. The Koch administration calculated a 2-year budget saving of $43 million if all increments and longevity payments could be eliminated.

Many city employees receive what is called “terminal pay.”
All uniformed employees and sanitation men are entitled to 1 month paid leave for every 10 years worked, prorated for those with less than 10 years. Civilian workers, after 15 years’ service, are eligible for 1 month for every 10 years worked (or, like all civilians, they can choose to take 1 day’s pay for each 2 sick days not taken). The Koch administration, for its 1978 labor negotiations, estimated that elimination of terminal leave would have saved $5.4 million in fiscal 1978.

Many uniformed employees receive special holiday pay, even when they don’t work holidays.
Commissioner Russo, an outspoken opponent of bloated benefits, complains: “An inordinate number of policemen do office work. A patrolman works from a chart, which defines the number of days he works and the number of days he’s off. In addition to his salary, every year he is paid for 11 holidays—let’s say $80 a day, or $880 a year—whether he works the holiday or not. The guys in the office rarely work holidays because they’re not on a chart. Yet they still get extra holiday pay for 11 holidays. Thus they get paid twice for the holiday.” The Koch administration calculates that taxpayers could save $10 million a year if this benefit went only to those who actually worked holidays. They also claim that holiday pay adds 4 percent to the salary of uniformed employees.

The city provides uniform allowances to those in 190 different job titles, including many who don’t wear uniforms.
In 1976, more than 93,000 employees received allowances of from $25 to $265. Detectives, for instance, don’t wear uniforms—yet they receive annual uniform allowances of $265. Koch claimed that $700,000 a year is distributed to workers who don’t wear uniforms.

Transit employees receive special “birthday pay.”

Through a special arrangement, city maintenance workers receive the same prevailing wage as skilled construction workers.
“If
we employ a carpenter, even though he’s doing maintenance, not construction, we have to pay prevailing construction wages,” says Russo. Mayor Beame’s Management Advisory Board recommended that this practice be terminated (Beame ignored this recommendation, as he did others). Russo says a change would allow the city to pay 25 to 40 percent less for new maintenance workers.

Sanitation men receive “out of town” work allowances for working in town.
Translated: A sanitation worker receives 4 hours’ extra pay, at time-and-a-half rates, if he is asked to work outside his normal sanitation district—even if asked to work in the same borough.

Sanitation men are paid overtime for 2 of the hours worked on Saturdays, though Saturday is a regular workday for many.
They are also the only city employees paid double-time rates for Sunday work.

City employees who work nights are paid a special night-differential rate.
This is standard in private industry. What’s different is that the city defines days as nights for certain employees. For most city workers, “night” begins at 6
P.M.
For transit workers, it also begins at 6
P.M.
, in the middle of rush hour, when they receive 10 percent more. For police and corrections workers, “night” begins at 4
P.M.
For sanitation men, it can begin as early as 3
P.M.
Commissioner Russo in 1977 estimated that if “night” were standardized at 6
P.M.
, the city would save at least $150 per uniformed worker a year.

The city also provides for pay differentials based on assignments or educational degrees.
In addition to shift differentials, these cover workers in 44 city agencies and are budgeted at $53 million in fiscal 1979.

Free lunches are granted certain city employees.
Corrections workers, who are not permitted to journey outside, receive free lunches. The city pays half the cost of meals for municipal hospital workers and those employed at Social Services Department institutions.

E
XCESSIVE BENEFITS
cost a considerable amount of money. But they generate, or represent, attitudes that may cost even more: that one is in public service not to serve but to grab as much as possible; that a government job is a right, not a privilege; that one’s benefits
are paid by “the city,” not the taxpayers.
Me
replaces we—
me
too,
me
wants,
me
demands, it doesn’t concern
me.