Friday, July 3, 2020

That Buyout? Probably Not Gonna Happen

In my last few posts I wrote about a possible piece of legislation that may, actually, make it through the legislature to offer an early retirement incentive for teachers. These buyout ideas are always long shots, but this bill had multiple co sponsors, was introduced in both houses on the same day and had other indications buried in the wording that made it look like a real contender to be signed by the governor.

That was all before New York City finalized and ratified its budget. 

The budget -which was rumored to carry deep cuts to schools- fixed its eyes on the NYPD and on central administration for much of the cuts to education. The only way schools were directly hit were that FSF remained flat instead of growing with inflation and the rise in teachers salaries. That hurts, there is little doubt. But the majority of cuts came from non school based services.

And the mayor indicated he would seek cuts of only $1 Billion from city employees and would work with unions in order to do so. That's steep/ But it is not so Earth shattering as to require a special law allowing employees to retire early. The final analysis of the budget seems to point to a reality that things are bad right now, but the city isn't facing the dire straights many thought it would be facing back in late May.

There are those who say these cuts will be on their way if the HEROES Act isn't passed and if it doesn't offer serious help to New York State's budget. Because of this, so the thinking goes, a buyout may well be on the way anyway. Those folks are half right. We're 1975 level trouble if that bill doesn't provide relief to the state. But, since all indications currently point to that bill making it through the Senate sometime after July 20 (when Congress reconvenes) and including relief for states. So it doesn't look like doomsday is going to happen.

On top of that, the bill I noticed itself provides for a brief 30 day window for employees to file for early retirement According to that bill, that window would open on July 30 and close in August. If that window were to be made, the bill would have to be further along than it is. Checking in A10595, it is still in the Governmental Employees Committee in the Assembly. Its partner, S8599, is still in the Rules Committee in the Senate, The bills were both introduced on June 5th. They haven't' moved out of their committee and have not even begun to be scored in any meaningful way and tomorrow is July 4th. This doesn't leave the kind of time one would think for something to go through the processes and be passed and signed then prepared for employees.

There are folks who may think 'well, they could just change that date. Bills are made from words and words can be edited at any time' and, those folks are right. That could all happen.

It's just that it doesn't look like it will. As bad as it had been, I would like to think government hasn't gotten so bad that they would force a bill like that through with almost no time for people to put in their papers. There would be an outcry from every public employee in the state if not enough notice was provided.

So, the bottom line? It just doesn't look like it's going to happen.

There is still a possibility that all employees may lose 1-2 percent percent of pay through some type of  furlough scheme. A billion dollars in savings (which is what the mayor announced he would be seeking from public employees) from among the roughly 305,700 city employees is about $3,200 per person. For a top earning teacher, that is roughly 2.5% of annual pay. So furloughs, along with some other cost saving measures, may be what plugs the budget hole that is left. Not (probably) a buyout. 

Saturday, June 27, 2020

Haven't We Been Through Enough?

In my last post, I wrote how the early retirement incentive being debated in Albany. In short, the incentive would allow almost any public employee in the state to retire by the end of the summer if they have 25 years of service and are 55 years old. Anyone who qualifies would get up to a three year pension credit if the choose to retire early.

This is means that almost any public employee in New York who is 55 years old or older and has 25 years in will be able to retire with 28 years.  I ended the post writing that it didn't seem like. abad deal.

And it really isn't for most public employees. Typically, the retirement rules require 30 years of service and the bills currently before the Senate and the Assembly would shave five years off of that. That's a very good deal for most public employees.

It's a great deal for NYC Sanitation workers. A great deal for NYC Custodians. An amazing deal for  DC 37 members. It's just a great deal all around. 

It happens to be a terrible deal for one type of public employee: The New York City School Teacher. Why? Because an unusually small amount of city school teachers will qualify.

Many city school teachers, who would otherwise have qualified for the package, had already opted into another 25/55 retirement plan all the way back in 2008. That plan was a trade; the teacher union agreed to a merit pay scheme by the Bloomberg administration and, in exchange, a special 55/25 early retirement incentive was offered to all city teachers. Anyone who wanted could opt in, pay a small amount from each check (1/85%) and, by the time the reached their 25/55 threshold, could retire. Teachers have been reaching their 25/55 threshold, and have been retiring under the plan ever since. (In 2019, around 8,500 city teachers retired. Many under this plan (see page 139)).

The 2008 deal wasn't made to all public employees. It was only offered to school teachers of New York City. 

Gov. Eliot Spitzer is poised to approve a deal that would sweeten retirement incentives for New York City teachers, a move that their union and Mayor Michael R. Bloomberg support but that budget watchdog groups say is financially risky.
Because Mr. Bloomberg has agreed to the measure, which would allow teachers to retire five years earlier than they can now and still receive full pension benefits, Mr. Spitzer is likely to sign it, according to an administration official who did not want to be identified because no final determination had been made.

And because of this, city school teachers will benefit least from the incentive that is currently being debated in Albany (see my last post here for a link to the bills in both houses of the legislature). 

So when I said 'not a bad deal', I was wrong. This is a pretty bad deal for New York City teachers.

Haven't we been through enough? The Post -The NY Post- has even caught on to how bad city teachers have been hurt over the past few months, noting that teachers haven't even been informed of how many of us were exposed to COVID back in March. City teachers had to petition to even have our schools closed in the middle of the month and almost everyone I know does not trust in the processes of the city school system to adhere to CDC guidelines next Fall. Now they face a retirement incentive that will incentivize precisely (or very very close) to no one who teaches in New York City.