Bloomberg at the Crossroads

With a Budget That Will Define Him, Mayor Mike Pushes Pataki, Unions

When Mike Bloomberg, alone in a rented helicopter in the mid '70s, heard the engine explode and saw thick black smoke billowing into the cockpit, he had a few seconds to respond before going down. He hit the "push to talk" button to give his location to the active local radio tower he was already monitoring. Riding high enough over water to make it to nearby land, as was his studied practice, he was able to disconnect the engine from the transmission and let the overhead rotor spin free, carrying him softly toward the ground. Just a few feet from landing, he changed the pitch of the blades to generate lift and again break the fall.

Years later, shortly after takeoff in a Piper Cub with his nephew aboard, "the governor in a propeller" popped, he wrote in his 1997 memoir, Bloomberg by Bloomberg. That dangerously flattened the propeller blades since the governor controlled the oil pressure that usually kept them at an angle, robbing the plane of any thrust. Bloomberg managed to glide back to Westchester Airport, saved a second time because he'd gained altitude so quickly he was high enough to land even though his plane had no thrust.

The lessons Bloomberg learned from these self-described near-death experiences may well be guiding him now, as his city faces its own. "Don't panic," the memoir lectured. "Do what you were trained to do. . . . There's no hypocrisy, no 'fudging.' All pilots learn to make a commitment and stick to it, follow the book, and depend on others to do the same. Consistency in thought and conduct in the aviation world is required to live. In our everyday life, it's important for success as well."

There was no sign of panic when Mayor Mike announced his second budget last week, though he acknowledged the perils facing a city whose Wall Street engine is dead, and whose propeller "governor," as he put it in his book, offers "no forward drive." Just as Bloomberg attributes his life-saving navigation to preparation and steadiness, he believes he's spent his first 16 months in office readying the city for this stark test.

To avoid the crushing cuts revealed in this budget, he's focused every pressure he can muster on state and union officials, who he is convinced can, without great harm to themselves, close the city's looming gap. He wants the governor's education cuts and Medicaid swap reversed, a tax on transients, and $600 million in real labor savings. He's refused to listen when either the Albany triumvirate or the union brass has said no, as they've taken turns doing in recent weeks. He's confident his demands of each are fair—a doable return on everything he's done for them since taking office.

He waited, for example, until November, just days after the governor's re-election, to modify his budget, impose a hiring freeze, and enact the largest property tax hike in NYC history. That delay helped George Pataki get the biggest slice of city votes of any GOP gubernatorial candidate since Nelson Rockefeller, even as it deepened the city's fiscal hole. He sold the city to the White House for the 2004 convention, securing a national stage for Pataki's national fancies, and making a clean and safe NYC a GOP goal for the next 17 months or so. He even became the first mayor to throw a high-priced fundraiser for a governor, luring high rollers to his East Side townhouse, while flying the other two men in Albany that matter, Joe Bruno and Shelly Silver, to his Bermuda estate for a little schmoozing in the sun.

No union leader has hitched a ride to Bermuda on the mayor's private jet, but he has flown them to Albany, where he expects their record-setting lobbying and campaign contributions to add to the heat on the three decision makers. He's also given Randi Weingarten, the teachers' union president who also heads the Municipal Labor Committee, the most expensive labor contract in city history, with raises of up to 22 percent. He even let the governor join the settlement press conference—an unprecedented appearance and a prelude to the union's equally unlikely endorsement. A long overdue police contract followed, as did, unnoticed by the media, a new agreement for school supervisors just last week, in the middle of all the budgetary saber-rattling.

He didn't seek serious productivity improvements in any of his early labor deals, though the unions who benefited backed his 2001 opponent. His first budget, which covers the fiscal year that will end in June, called for $500 million in union concessions but settled for $220 million. Even that was merely a "no skin off my nose" union acquiescence to a stretch-out of new cost-of-living payments to the pension funds that the state mandated the city make, an interest-heavy loan that adds to city costs in the long run. That first budget slashed services by $1.9 billion, but was designed to spare top union players like Weingarten.

Mostly, though, he thought his willingness to absorb the public drubbing in the tabloids and the polls over the November tax hike, taking on the national anti-tax gestalt with Nixon-to-China boldness, would stand him in good stead with the unions and their Albany allies. Instead, his critics, like Silver, who ironically sat out the gubernatorial election last year, blast him for not blasting the governor harshly enough, though he has, without rhetoric, turned Pataki into a bull's-eye.

His willingness to do huge tax increases—even bolstering an almost progressive property levy that discriminates against business interests—speaks louder than words about the governor's wholesale rejection of boosting any so-called "job-killing taxes." He even exposed Pataki's under-the-radar attempt to steal federal homeland security funds targeted for the war-threatened city, winning 80 percent of the vital cash, but instead of taking public advantage of the victory he took the governor to a friendly dinner.

The unions, embodied by Weingarten, tried a repeat performance of the 2002 pension loan, but this time he's let them know that the city has to do more than buy time, and the unions have to do more than sell it. Similarly, he rejected as a hollow concession Weingarten's call for early retirement bonuses to induce thousands of senior teachers, just awarded a landmark salary hike based on their union-saluted experience, to take $50,000 pensions prematurely so the city could temporarily benefit from hiring new, cheaper teachers as replacements.

In his memoir, he has a handful of angry moments. "I find it infuriating," he wrote, "when my former wife asks our old friends for help with her [philanthropic] fundraising and they ignore her. How dare they, considering all those years both she and I together supported their charities and political candidates? People need to know that life, like it or not, has to be quid pro quo." His other pivotal self-perception: "Somebody has to bring us to a centralist consensus acceptable to most, with the minimal imposition on those at the fringes. That's what politics is all about."

That's also how he's prepared for this doomsday threat, and that's why he expects his city to survive it. He believes he's got enough altitude to land this ship of state, damaged but safe.

In the city's worst moment in a quarter century, he is the antithesis of the two mayors who brought us to the precipice of bankruptcy in the '70s. John Lindsay, a party-changing East Sider like Bloomberg, sank the city into debt to advance a national agenda and ambition, getting out before the collapse. Bloomberg says his next job will be to start his own foundation so he can give his billions away carefully and constructively. His political goals are so impersonal no one knows for sure, despite his own admonitions, if he will even seek re-election. Higher office is nowhere in the mix. Abe Beame, the mayor who presided over the near belly-up, was a walking IOU, carried into office by every clubhouse, real estate, and union baron who could buy a piece of him. Bloomberg's only special interest is whatever interests him.

He can accurately be criticized for adopting Pataki's special interests prior to the re-election, but now, he is liberated as well from whatever obligation in his quid pro quo universe he felt he owed his electoral patron. He is literally a mayor unto himself, able to act as he judges best, with no campaign committee collecting timely contributions, no lobbyists with inside tracks, no stifling ideology, and no egocentric goals to shape him. Emerging overnight as mayor out of the cloud of concrete dust that engulfed ground zero, he is an enigma to the power brokers who've found a way to compromise every other administration, a pol unlike any they've ever known.

Though the best pollsters in the business, Penn & Schoen, guided his campaign, and though purchasing a poll now would be as easy for him as buying a 25-cent, Bloomberg-bashing Post is for most New Yorkers, he will not link his policies to poll-able preferences. His memoir establishes the linkage that matters to him—philanthropy and government service are two sides of the same coin to Bloomberg, the noblesse oblige consequence of great wealth. "Give something back and you'll end up with more!" were the final words of his book. "Philanthropy and public service," wrote the man who gives away $100 million a year, "are my two great loves after my daughters and my company."

In the cynical air of City Hall, these bromides may be greeted with sneers, but there is little in his brief public record to merit mistrust. Even a hard-right mayor like Rudy Giuliani threw sops to the unions, especially in his first term, because he knew no Democrat could seriously challenge him without them. Those sops—like early retirement and severance bonanzas disguised as union concessions—are precisely what Weingarten is invoking as precedent today. But Bloomberg, who certainly claims he'll run again, won't play that game, aware no doubt, just as Giuliani was, that municipal labor is the irreplaceable center of any coalition that might form to oppose him.

The Democrats who might oppose Bloomberg, or who hope to run if he drops out, have bound themselves uncritically to the unions, unwilling to join the mayor in a demand that Weingarten and company make any meaningful contribution to closing the gap. A spokesman for Comptroller Bill Thompson, who made it through the Iraq war without ever taking a position, confirmed that he has never said a word about the need for union concessions. Even though he is charged with oversight of the scandalously wasteful union-run and city-subsidized welfare funds, and even though his office's audits and those of his three predecessors have suggested a city takeover of these funds, he would not take a personal position in response to Voice inquiries.

Gifford Miller, the City Council Speaker, issued an alternative financial plan that theoretically balanced the budget without mentioning "union concessions," instead explicitly embracing the off-the-point propaganda of District 37's white paper on excessive city consultant contracting. Miller's budget director, Larian Angelo, offered a technical explanation for why the concessions were omitted and added that the council believes it is "necessary for the unions to help the city as they always have," adding that "$600 million sounds like about the right number."

Miller spokesman Chris Policano said the council hasn't commented on the concessions because it tries to stay away from collective-bargaining issues. But the council's alternative plan nixes Bloomberg's proposal to save $12 million a year by reducing some five-man engine companies by a man, which is a union-contract issue linked to excessive sick leave.

The council has no position yet on a union surprise in the mayor's budget—the "emergency" suspension of some teacher sabbaticals, fiercely opposed by Weingarten, who insists Bloomberg is trying a $35 million end-run around the contract. The mayor isn't counting either sabbaticals or four-man trucks as part of the $600 million in union concessions, though they certainly require sacrifice by union members. He won't list them as concessions because he's trying to implement them without labor's consent, employing a strict reading of the contracts to justify it.

Such linchpins of Miller's leadership team as councilmembers Christine Quinn and Bill Perkins actually joined the recent Weingarten-orchestrated anti-Bloomberg press conference on the steps of City Hall. And borough presidents like Virginia Fields, Adolfo Carrion, and Marty Markowitz, as well as Public Advocate Betsy Gotbaum, issued press releases that mimicked Miller's mantra, assailing the state without asking anything of the unions.

It was not always this way for liberal Democrats. When Mark Green was Public Advocate and Ruth Messinger borough president—both preparing for eventual mayoral runs—they suggested union concessions in analyses they issued during Giuliani budget crunches of the mid '90s. In fact, Messinger, who is now out of politics, told the Voice that many of the unions made her "an object lesson" of what happens to a Democrat who does, backing Rudy against her in the 1997 elections. Green, who lost to Bloomberg in 2001, says he'd be seeking the $600 million if he were mayor but faults Bloomberg for "not approaching his natural economic enemy thoughtfully," saying that "labor feels insulted" by Bloomberg's "inflexibility."

What Bloomberg wants are concessions like the city administration of welfare funds, which costs workers nothing but could save $150 million, requiring only that union leaders give up 104 separate power bases to avert punishing layoffs. Like minimal co-payments on medical coverage, Bloomberg's welfare fund initiative is an attempt to get city workers in line with most other public employees, including the state's. But police and fire union leaders have made it clear they prefer layoffs, especially since they know it won't be their members, but rather those of DC 37, the mostly minority civilian workforce disproportionately punished in Bloomberg's first pink-slip list.

What Bloomberg wants from Albany is the passage of its own tax—apparently about to be delivered—to pay for billions in restorations over the governor's veto—as well as the authority for the city to add a tax. He and Miller have their own differing commuter taxes, with Miller's making far better sense, since it also rewards suburban governments with revenue from city residents who commute to work out there.

But if the Albany stonewall continues—and Silver won't even reinstitute the old, extremely low, commuter rate he cravenly repealed, putting the ball squarely in the GOP's court—then the mayor seems ready to do other taxes. To avoid adding a city income tax hike to the state levy the legislature may adopt, he might want to consider a half-penny stock transfer tax, which he has so far criticized, without examining how every other major stock exchange manages to live with one.

His hand is still steady on the city controls, using all those "numbers, techniques, gizmos and gadgets on the instrument panel," as he recounted in his memoir's account of the flying crises. "There's still something," he wrote, "about arriving safely that's very satisfying." This time, we're hoping he'll land us all.


Research assistance: Cathy Bussewitz, Alexa Hinton, Felicia Mello, Solana Pyne, E.B. Solomont, and Steven I. Weiss

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