Mayor's Battle to Stop VSF Payments Fizzles

Chief Leader - June 07, 2011


Six months after it began, Mayor Bloomberg's campaign to stop the payment of Variable Supplements Fund benefits to current and retired uniformed workers appears to have failed.

No home-rule message has been introduced in the City Council, as would be required for the State Legislature to make the changes necessary to cancel the annual $12,000 checks. And with the Legislature's session close to an end, there is no sign that any Albany lawmaker is willing to introduce a bill.

'Considerable Resistance'

"We simply can't afford the level of benefits we've provided in the past, so we've explored ways to reduce the city's costs," Deputy Mayor Stephen Goldsmith said in an interview last week. "Understandably, those efforts have been met with considerable resistance."

The unions were pleased with the news.

"I'm thrilled," said Uniformed Firefighters Association President Steve Cassidy, who said he'd also "heard from Albany" that the bill was dead in the water. "They thought they were going to take something away from us that was negotiated."

Patrolmen's Benevolent Association President Patrick J. Lynch said: "The PBA worked hard to ensure that all of the elected officials who would have had to vote for a change in legislation were well-educated about the history of the bought-and-paid-for Variable Supplements Fund. We have no intention of letting our guard down and will remain vigilant in our efforts to protect all of our members' hard-earned benefits."

Roy T. Richter, president of the Captains Endowment Association, also emphasized that the benefit had been bought and paid for. "It was disturbing how it was introduced by the Mayor to begin with," he said. "Calling it a Christmas bonus was interpreted as a slur against all retirees."

'Unfair' to Go Back on Deal

"The City Hall proposal to do away with the VSF did not gain support with legislators, both upstate and downstate, because when you examine the facts it wasn't a good economic decision for the city, police and fire employees and the public," said Michael J. Palladino, president of the Detectives Endowment Association. "I think the Legislature honored what was collectively bargained and any changes would be unfair. In normal economic times, the VSF has been a financial bonanza for the city. It took the unions and the legislators to realize what City Hall didn't."

In the late 1990s, when the stock market was booming, it was estimated that the changes in the fund had meant an additional $4 billion for Mayor Rudy Giuliani's operating budget.

Thomas Sullivan, president of the Lieutenants Benevolent Association, said that the failure of the initiative "was in part due to successful lobbying by police unions. The unions were successful. I feel it was right that we were successful."

"I'm not saying we can't share in the sacrifice," said Norman Seabrook, president of the Correction Officers Benevolent Association, "but the sharing should come from everyone, not just us." The unions have sharply criticized Mr. Bloomberg for joining Governor Cuomo in opposition to extending the millionaires tax, an income-tax surcharge that runs out at the end of the year. They call letting it expire a tax break for the wealthy.

'Can't Afford Holiday Bonus'

In his State of the City speech in January, Mr. Bloomberg said he wanted to end the VSF "bonus" because the city could no longer afford it. "City taxpayers just cannot be expected to give substantial holiday bonuses when so many of them are out of work or having their own wages frozen or cut," he said.

Over the ensuing months of back-and-forth with the unions, Mr. Bloomberg gave various figures for the annual cost to the city of the VSF benefit, the highest being $1 billion.

The unions responded that the benefit checks came from funds originally created by the unions and that the city had not kicked in any money since 1995. Further, they said, they had paid for the VSF twice through contract concessions, first by allowing their members' pension funds to be invested in the stock market and later by stretching out the period before reaching top pay from three years to five.

They also criticized Mr. Bloomberg for attempting an end run to the Legislature, saying that in the past, despite state laws prohibiting pensions from being a subject for negotiation, the unions and the city had worked out their differences and presented a united front in Albany. Finally, they were offended by Mr. Bloomberg's repeated references to the payments--which are made in December--as a Christmas bonus, which they said implied that the money was optional and was not earned.

'Battle Against the Lies'

The PBA and the Uniformed Firefighters Association formed a coalition to fight what Uniformed Firefighters Association president Steve Cassidy called the Mayor's attempt to "steal" the benefit.

"We have joined in an alliance to battle back against the attacks, lies and false information" spread by Mr. Bloomberg in an effort to persuade the State Legislature to revoke the law that established the VSF payments, Mr. Lynch said at a rally in February.

The PBA-UFA coalition visited state lawmakers and council members to educate them on the history of the benefit and ran public-relations campaigns to combat Mr. Bloomberg's assertions, as did the DEA and the superior-officers unions. Mr. Palladino said he and his board members visited more than 100 members of the Legislature.

The payment goes to retired officers and firefighters with more than 20 years of service except those who are receiving disability pensions. Payments to Correction retirees--which were first approved in 1999--have been suspended because their VSF fund's profits have fallen below the minimum required.