The conventional wisdom says that Mayor Michael Bloomberg has moved left in seeking reelection this year. After all, as the New York Times notes, the mayor has opposed President Bush and the national GOP on several high-profile issues, including Chief Justice John Roberts’s nomination and the president’s suspension of prevailing-wage laws in rebuilding New Orleans.

But those who believe the conventional line should pay more attention to what Bloomberg has done lately than to what he says. On New York policy matters, Bloomberg has been acting more like the reform-minded mayor that voters thought they were getting in 2001.

The businessman mayor, spending his own money, won the 2001 mayoral race without much help from public-employee unions and other
special interests. But instead of using his status
as political outsider to govern as a reformer, Bloomberg struck a conciliatory tone with his opponents all through his go-along, get-along first term.

Bloomberg’s appeasement of the special interests hasn’t won him concessions from key unions or helped him solve the city’s thorny fiscal problems. Maybe that’s why he has sounded less
conciliatory of late. These days, he’s demanding that any pay raises for city workers go hand-in-hand with productivity increases. In their new contract, for instance, sanitation workers agreed to allow one-person trucks, instead of the current two-man crews, in exchange for a 17 percent pay increase over 51 months—a move that will reduce the department’s head count by 200 workers. And Bloomberg got the city’s teachers to agree to spend more time in class and to abandon the policy that allowed senior teachers to transfer into schools whether the principal wanted them or not. Though the teachers’ contract achieved no major reforms, it’s better than the mayor’s 2002 performance, when he helped engineer a $275 million raise for the teachers in the midst of the post-9/11 crisis.

Bloomberg also commendably refused to buckle under pressure from Local 1199/SEIU to add 25,000 of its health-care workers, currently working for private agencies, to city payrolls, thus boosting their benefits. The union dangled its political endorsement as a quid pro quo. SEIU locals elsewhere have used the same strategy successfully—with budget-busting results (see “The Conspiracy Against the Taxpayers” on page 42). After striking out with Bloomberg, health-care workers’ union leader Dennis Rivera offered the same deal to Democratic mayoral nominee Fernando Ferrer, who apparently jumped at it.

Bloomberg is betting that he can be reelected without the endorsement of the city’s two most politically powerful special interests. Winning that way would greatly strengthen his hand to pursue the reforms that New York desperately needs. Rudy Giuliani, early in his tenure, managed to restrain the city budget. But when the late nineties’ economic expansion sent revenues cascading from Wall Street into city coffers, creating tempting budget surpluses, Giuliani found it harder to enforce rigid fiscal discipline and roll back cushy union work rules and benefits packages. And even Giuliani wasn’t above using record tax collections to reward the unions, easing his own 1997 reelection bid.

Today, New York City’s budget seems built as if Wall Street were on a permanent roll. Yet a repeat of the heady 1990s in the financial markets is unlikely anytime soon, and anyway can’t be counted on as a regular occurrence. So New York still needs a hefty dose of fiscal reform to end its continual cycle of budget deficits and tax increases. And the work of reforming the schools is far from finished. A mayor not beholden to unions and special interests could be the answer to the city’s woes—if he chooses.


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