Lew Leone is the vice president and general manager of WNYW-FOX 5. He is taking to the airwaves with his thoughts on current affairs. It's called "Lew's View." The views expressed are not necessarily those of the station or its employees.---
In this commentary, Mr. Leone explains why the city's new contract deal with teachers is a big fiscal mistake.
Bill de Blasio has been mayor for over 5 months which has given him plenty of time to show us that he lacks management experience.
Most of his missteps were not major and didn't put the city at risk. Now, however, his inexperience with labor negotiations places New York City in great danger of another fiscal crisis.
In his haste to do a deal with the United Federation of Teachers (UFT) it appears that de Blasio either neglected to read the fine print or doesn't understand how to legitimately balance a budget.
Unfortunately this is just the beginning as the UFT deal is a blueprint for every other city contract.
There are so many things wrong with this intentionally confusing, irresponsible, and unaffordable settlement that I will have to address it in multiple editorials and I'll try to simplify the issues for you.
First of all, let me say that I love and respect teachers and hold them in high regard. An effective and engaged teacher in front of the classroom is the most important component of a successful education for children.
My issues are with the mayor's management experience and the union's implicit protection of the status quo without regard for student outcomes. In this view let's consider compensation.
The UFT worked without a contract for 5 years. That doesn't mean they didn't get raises during that time.
Only those making the maximum at the top step or lane didn't receive an increase but everyone else continued to receive substantial raises because the expired contract remained in effect.
In the just announced highly irregular deal everyone (including those who already received raises) gets 4 percent retro-active raises for the years 2009 and 2010. OK, while that may not sound like much to you let me tell you that is a staggering amount for taxpayers.
De Blasio's team puts the added cost of retro pay at $3.4 billion through 2018 or over $30,000 per teacher and they are not done yet as the number continues to grow to $5.4 billion by 2020 when full retro pay is realized.
Wait, how is that possible? If you thought two 4 percent retroactive raises on $100,000 salary is around $8,000 in back pay you would be off by $46,000 because it is really $54,000 in back pay through 2018 and even more through the year 2020.
These huge labor agreements are part of this year's balanced budget, but they cause billion-dollar shortfalls in future years.
It is a very unorthodox and troublesome practice to pay huge sums of salary in the future for work done in the past. In fact the rating service Moody's calls the deal credit negative. It is certainly not good fiscal management and is evidence that de Blasio got hoodwinked by the UFT.
That is the reasons why UFT President Michael Mulgrew is walking on air and bragging behind closed doors.
If you agree that these numbers don't make sense, your only recourse now is to contact Comptroller Scott Stinger, who has already changed one part of the deal, and let him know that he must insert himself further into the conversation before de Blasio does more damage and takes New York City over the fiscal cliff.
Unfortunately, Stringer also missed Management 101 is also in bed with the unions and shares a similar lack of management experience.