An arbitration panel yesterday formally awarded a 10 percent raise over two years to New York City's police officers, concluding that they are underpaid compared with police in other cities and nearby suburbs. By giving ammunition to other unions claiming to be underpaid, the panel's ruling could have serious financial consequences for the city.
In a unanimous decision, the chairman of the three member panel, Eric J. Schmertz, took the unusual step of saying that if he had the power, he would have granted an even larger raise to help the city's 22,000 police officers catch up.
The decision effectively rejected a decade of arguments by two City Hall administrations that resisted substantial police raises by contending that the officers' health and retirement benefits were far more generous than those in other cities.
The ruling will strengthen the arguments of other unions, most notably the teachers and firefighters, that they, too, deserve double-digit raises to bring their salaries into line with those paid by other cities and counties.
"The police ruling means a very large hit fiscally," said Charles Brecher, research director for the Citizens Budget Commission, a business-backed research group. "It's going to be fiscally destabilizing."
The ruling, issued shortly after midnight, covers only the Patrolmen's Benevolent Association and is binding on that union and the city. The panel assumed that the city's lieutenants, captains and other police unions would receive the same 5 percent a year for two years - actually 10.25 percent when compounded - and it estimated that applying the raise to all Police Department employees would cost the city $260 million a year.
The Independent Budget Office, a publicly financed nonpartisan fiscal monitor, estimated that the raise for the officers' union alone would cost the city a total of $490 million over three years, including increased pension costs. The budget office also estimated that if the police, teachers and all other municipal unions received 10 percent raises, the city would face an additional $2.3 billion in costs for 2003-5 - including years worked without a contract - and $1.5 billion in costs for 2006.
To help finance the raises, the panel called for several modest money-saving measures; among them, the police are to relinquish their one annual personal day, and rookie officers will receive less during their six months in the Police Academy.
Rookies will start at $25,100 and rise to $32,700 after six months; after several additional steps over five and a half years, they reach the maximum base pay of $59,588. The old base was $54,048.
Mayor Michael R. Bloomberg applauded the decision, saying it provided important savings.
"Today's decision contains the necessary cost-savings and productivity to give our police officers the increases they deserve," he said.
Randi Weingarten, president of the United Federation of Teachers, applauded the arbitration ruling and said its emphasis on the comparability of pay with other communities applied just as strongly for the teachers, who say that they, too, are underpaid. The Bloomberg administration said yesterday that any unions hoping to receive raises above the District Council 37 pattern - including a 5 percent raise over three years - must pay for them through productivity changes.
Patrick J. Lynch, the officers' union president, also praised the ruling. "While this 10.25 percent raise over two years significantly exceeds the pattern that the mayor wanted us to accept, it's only a step in the right direction for us to complete our goal of being the best paid police department in the country," he said.
Mr. Lynch criticized the lower starting pay for rookies, saying it would aggravate the city's trouble in recruiting officers. Deputy Police Commissioner Paul J. Browne said yesterday that the department was exceeding its recruiting goals.
Mr. Schmertz, a veteran mediator and arbitrator and a former city labor commissioner, was accepted by both sides as the panel's chairman.
During negotiations with the officers' union, the administration said repeatedly it should receive no more than the pattern established by its contract with District Council 37, the largest municipal union. That union agreed to a wage freeze and a $1,000 one-time payment in the first year, a 3 percent raise in the second year, and 2 percent in the third year.
The panel rejected sticking to that pattern, though. Mr. Schmertz wrote that he had weighed the criteria that the law calls for: comparability with police in other communities, the city's ability to pay, and the peculiarities of the profession. He noted that the city has a $3 billion surplus and that officers did more dangerous work than civilian employees.
He noted that New York ranked 14th among 20 large cities in police pay. He also noted that New York was lower than nearby communities - including Nassau County, where the maximum base pay is $93,079.
"New York City police officers need only look across contiguous borders to see police officers with less duties, less responsibilities and less stress and danger receiving greater pay," Mr. Schmertz wrote.
He also wrote that he had wanted to award a 20 percent raise over four years but that state law prohibited arbitrators in municipal union disputes from issuing awards covering more than two years.
He acknowledged that the ruling could influence raises for other unions and strain the city's budget, "but my authority and duty is confined to this case and the city's ability to pay this award," he wrote. "The impact on other negotiations and the ability to pay the results thereof are not before me, and must be left to the collective bargaining process in each instance."
Mr. Schmertz described the relationship between the city and the union as nearly dysfunctional.
"I am distressed at the apparent confrontational relationship between these parties," he wrote. "Bluntly, it is too antagonistic, too angry and too reciprocally suspicious."