City Hall has just announced that Mayor Nutter is unilaterally freezing all "salary increases, including pay step increases or longevity increases" for municipal workers. The city says it will save $8 million this fiscal year andnearly $80 million over the next five years if the freeze stays in place. Nutter says he can do this because the contracts have expired; Cathy Scott, leader of AFSCME DC 47, has already promised a court action to overturn the freeze.
Here is an important point: these frozen wages do not represent new savings. The salary freeze, increased pay steps, and end to longevity pay are already included in contract proposals offered to city unions, which were counted in the oringinal five-year plan. The interesting twist is that Nutter decided to announce them unilaterally instead of waiting until new agreements are negotiated, which means this announcement could quickly be overturned at the bargaining table.
That move has already been met with raspberries from most of the leadership from city unions; it's also likely to ratchet up pressure on the City Council members to give up their Cost of Living Adjustments (COLAs) that were scheduled to take effect in the next fiscal year. Nutter doesn't have the power to freeze City Council's salaries, because they are independent elected officials.
Whether the freeze will stay in place for city workers is a big "if." The city is currently in arbitration hearings with the unions representing police officers and firefighters. These are the employees who benefit the most from longevity increases-- which are payments made to workers based on their length of service-- and the arbitration panel could easily overturn the freeze put in place by Nutter. In fact, if patterns from previous arbitration awards hold, longevity increases could actually increase. Nutter probably has a better shot at holding the line with non-uniformed employees, since he actually can bargain with them during contract neogtations.
That said, Nutter's announcement could be a sign of things to come. If the state legislature fails to approve increasing the Philadelphia sales tax from 7% to 8%, Nutter will be forced to cut hundreds of millions of dollars from the city budget-- in an extremely short amount of time. That means mass layoffs of city employees, cuts to major outside contracts, and the shutdown of numerous city facilities.
All of these actions would be taken unilaterally by Nutter and there would be very little the unions, City Council, or public could do to stop him.