New York City Averting 4,000 Teacher Cuts Challenges Bargainers on Budget

Harry Nespoli, chairman of the city’s labor coalition, suggested letting New York use some of the $400 million of excess cash from the union health-insurance fund to pay for teachers that would be fired under the mayor’s $65.7 billion spending plan. Council Speaker Christine Quinn and Finance Chairman Dominic Recchia Jr.say the city could save $125 million by slashing non-classroom outlays on such things as public relations and outside consultants.

New York’s workforce, already down 5 percent to 296,000 jobs since 2002, will fall to 289,000 under Bloomberg’s budget. U.S. municipalities trimmed 28,000 positions in May, the most since November, the U.S. Labor Department said June 3, as shrinking revenue forced cuts to services. State governments now employ the fewest workers since January 2007.

“State and local governments are just having their budgets slammed, and because they can’t run deficits, have to make the choices to cut workers,” Heidi Shierholz, an economist with the Economic Policy Institute in Washington, which studies issues affecting low- and middle-income workers, said in an interview.

Bloomberg said he had little choice in crafting his budget, a version of which must be adopted by June 30. State and federal aid for the city was slashed about $5.6 billion, while growing expenses such as pensions and debt service create the prospect of $5 billion deficits in both fiscal 2013 and 2014, he said.