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NYC Cites Financial Crisis as it Cancels $900M in Deferred Teacher Payouts

Due to the coronavirus-induced financial crisis, the de Blasio administration has canceled a long-scheduled $900 million deferred compensation payout for former and current teachers.

First Deputy Mayor dean Fuleihan wrote to the teacher’s union on Thursday,  stating that the payout due this month was called off to help limit layoffs.  The payout was the last of five payments set in place through union negotiations between 2009 and 2011.

In a letter written to the president of the United Federation of Teachers, Michael Mulgrew, Fuleihan wrote, “It is the city’s desire to avoid the necessity for layoffs, and to make a retroactive payment at this time would therefore be fiscally irresponsible.” 

He added, “The City regrets having to take this necessary action, particularly in light of the assistance and cooperation of the union and its members in opening schools over the past several weeks.” 

Fuleihan noted that the canceled payment is coming at a time when teachers are putting their lives at risk by returning to the classroom for blended learning during the ongoing pandemic.

Mulgrew announced that the union will fight for the wages with an arbitration hearing on Friday. 

In a video message to union members, Mulgree declared, “I will go into arbitration tomorrow. We will present the case, which is very simply: We want the money that you owe us now.”

He added, “We all understand that we’re in a pandemic; that our economy has basically been wrecked – but this money is money that we already earned … from over 10 years ago, and the city needs to make good on their obligation.” 

City Hall spokesman Bill Neidhardt backed up the claim that this was a necessary action for job preservation, but acknowledged that teachers are enduring a chaotic school year.

In a statement, he said, “This action is necessary to avoid painful layoffs, but make no mistake, New York City recognizes our teachers go above and beyond for our students and schools every day.” 

This announcement comes just a few short weeks after New York City teachers were sent back to school on September 21, despite the COVID-19 pandemic. Teachers were expected to return to their classrooms (many of which had not been entered since the outbreak of COVID-19 and school closings in March) and prepare the space according to health and safety standards.

While many teachers felt that students would benefit most from in-person instruction and that this was a necessary action, many others did not want to expose themselves and their students to the coronavirus. 

Only time will tell how the proceedings will unfold and what the final decision will be. 

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