Mayor Nutter, who has been accused of kicking the can down the road when it comes to settling contracts with municipal workers, has at last kicked it into the path of the city-employee unions.
Nutter sent the unions a message by using his executive powers to grant a 2.5 percent raise to the city’s 5,500 managers while taking more from their salaries to pay for health and retirement benefits.
His creative interruption of the tradition of settling with the unions and then giving supervisory workers a comparable package comes after three frustrating years of trying to get labor representatives to take a similar deal.
The maneuver increases the pressure on labor to compromise, and draws attention to the urgency of containing Philadelphia’s growing employee-benefits costs.
In announcing his decision last week, Nutter noted that “in a year or so, we’ll be faced with 25 percent of our budget going to pension and health-care costs.” That is simply unsustainable; employees’ share of the burden must increase.
Managers’ contributions to their pensions will go up 1.5 percent and their health-care contributions will more than triple. With City Council approval, new workers would be funneled into a hybrid pension plan that will likely yield less retirement income than the city’s defined-benefit plans.
Meanwhile, Nutter is also asking the Civil Service Commission to give him the authority to impose furloughs of undetermined lengths. The furloughs, which he says would be used to cover budget gaps when necessary, could completely wipe out the 2.5 percent base pay raise. Each week of furlough time equals almost a 2 percent loss of income.
The unions representing city workers other than police officers and firefighters are calling the mayor’s package for management a pay cut, because it would generally raise employee contributions for benefits above the amount of the base raise. Union leaders say such concessions should be negotiated. True, but the bargainers must be realistic. (Police and firefighters’ contracts were settled through arbitration.)
AFSCME District Council 33, which represents 9,100 blue-collar workers, and District Council 47, representing 3,300 white-collar workers, can’t keep kicking the can either. Three years without contracts means the city is three years behind in reducing costs that would ensure the longevity of workers’ pension funds.
The unions may not think it’s fair to ask workers to pay more for benefits. But neither is it fair to ask city residents, who have been hit with multiple increases in property and other taxes, to keep struggling to pay workers more than taxpayers can afford.
New contracts should include ways to cut direct health-care costs and to make insurance plans more affordable. It’s time for the unions to strike a deal with the mayor. Further delay puts the solvency of their benefits funds in jeopardy.