The big story: former New York City Comptroller Brad Lander conducted an audit, published just before his leaving office, that revealed billions of dollars from our Health Insurance Stabilization Fund1 were misused by the OLR and the MLC. You can read about it in detail here: TheCity – Lander Audit. Or better yet, read the actual report. Some of us at NAC (but this article should not be seen as an official NAC position) have read through both and have some key takeaways. A few of those takeaways differ in somewhat substantial ways from the opinions that have been circulated in other UFT circles.
As The City reported, “the probe paints a picture of the city and the unions using the fund as a virtual piggy bank, authorizing $4.3 billion from 2001 to 2024 in lump sum payments to the city and to union-administered general welfare funds, including $1 billion to cover the costs of raises, deferred layoffs and other benefits.” However, we should take the language of ‘piggy bank’ with a grain of salt. For one thing, union contracts have oscillated between pay adjustments that barely met cost of living increases to pay adjustments that lagged far behind them. At the same time, our healthcare has diminished in value, with employee-based costs like copays increasing dramatically even as premiums technically stayed flatly at zero. So there is not a question here of unions getting some sort of extra benefit from using funds creatively from the Health Insurance Stabilization Fund on top of an already generous base amount from traditional sources. The question is more why those traditional sources were not really used to fairly compensate workers such that labor representatives felt compelled to act creatively by using, and ultimately misusing, a now insolvent fund that had a specific purpose.
Both the OLR/MLC argue that the aforementioned uses (i.e. raises, deferred layoffs and other benefits) were legitimate uses of the fund. But, Lander’s office disagreed. That office additionally named a number of objections over issues with documentation/reporting, not to mention what they saw as insufficient action to try and replenish the fund after it was clearly becoming insolvent. Even if one takes the argument that a different comptroller might have interpreted the fund as being used validly (implicitly suggested by some of those involved), it’s impossible to see past many of the problems outlined in the report. One key here though, which you aren’t seeing in the versions of events being reported by some UFT opposition bloggers, is that the report made both the MLC and OLR look very bad. In some ways, it frankly appears that OLR, an actual office of the City, looks even less good than the MLC in this report, written as it is by another office of the City. But ultimately, in stark contrast to where UFT bloggers normally stand, which is to say so out of the loop that it is difficult to avoid straddling the lines between reporting, interpreting, and speculating, we are instead met with a deluge of data the likes of which we rarely have access. To some extent, then, we will need to read and reread the new information Lander’s former office exported before executing final critical judgements. In the meantime, the report does lead us to ask several questions.
- Insomuch as many on the ground suggest that Lander’s report was politically motivated, why would a DSA-affiliated politician publish something that could have the effect of harming the unions? Our guess is that was not Lander’s intent. Notably, while Lander mentions that OLR is coming after the MLC to retrieve over three billion dollars in owed monies, he did not take the stance that the MLC owed that, in fact criticizing OLR again and again for their role in the debacle, and admitting that, for instance, former Mayor Adams himself gave up on one of the cost-saving measures (a MAP plan) to which the MLC and the OLR had previously agreed.
- As an aside to this point, given that OLR sued the MLC to repay billions of dollars in unrealized savings and that one of the MLC’s best legal arguments against paying that money is that it wasn’t their fault the money didn’t go the City, but rather was outside of their hands due especially to the legal cases brought against the City by outside organizations, aren’t some of the demands being made by outside organizations and our own opposition groups, e.g. that a union division should somehow and impractically, officially support the very lawsuits that could be seen as being primarily responsible for preventing the realizations of savings, e.g. through the venue of amicus briefs, dangerous, legally, for the UFT and other MLC unions? Is it possible many in the opposition have been taking bad advice that would harm their members, especially in-service members, by making an arbitrator more likely to side with the OLR over the MLC by using what would look like official support for actions that caused the MLC/OLR deal(s) to implode as evidence that it was the MLC’s fault?
- If, as Lander’s report suggests, even with MAP and the new in-service health plan we would not meet the agreed-upon savings, what other changes, both neutral and negative, might have been down the pipe?
- What are the implications of the MLC promising savings which were contingent on major and unpopular healthcare changes that they were unable to execute even as the debt accrued? In addition to the democratic issues here, e.g. promising savings that hinged on, for instance, a MAP plan that unconsulted retirees clearly did not want, for many of those thinking through these issues, this is one of the most guilt-inducing aspects of the report where the MLC is concerned.
- Why would the MLC agree to subsidize our contracts again in 2018 when, according to this reading of this audit, it was clear as day that the agreement to subsidize our 2014 contracts was already killing the HISF?
- What does it say about the style of unionism that MLC-affiliated unions, particularly DC-37 and UFT have, that we are left to salvage, apparently improperly, through a fund we need for specific purposes, just to get minor increments to our pay or no-layoff promises? What does this say particularly in the context of pattern bargaining? What could we do differently and what would that look like? What would it take?
These are just some of the questions we have at this juncture. More to come.
Footnotes:
- The Health Insurance Stabilization Fund (HSF) is critical to how our health insurance is funded. The City is legally required to cover our healthcare up to the HIP HMO rate. Most city employees are/were enrolled in the GHI CBP healthcare plan. In years when the HIP HMO rate was higher than the GHI CBP rate, the City placed the difference into our HISF. In years when the GHI CBP plan was more expensive than the HIP HMO, money was taken from the HISF to pay back the City. This is called equalization. It’s super important because it basically protects us from paying premiums, higher deductibles, higher copays, etc. straight from our paychecks. At one point, the HISF was flush with cash – billions. We used some of that money to create additional benefits, specifically the PICA program that covers chemotherapy, injectables, etc. However, now the fund is insolvent. ↩︎
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