City cuts encourage layoffs

From the NY Times:

Even as Mayor Michael R. Bloomberg says that he is trying to avert laying off city workers, his aides have quietly encouraged such job cuts through an internal budget maneuver, according to city documents and interviews with those who have viewed them.

But the administration, which prides itself on transparency, has not disclosed the maneuver to the public, or to the municipal unions that may be affected as the city scrambles to cut costs.

The administration’s plan to trim spending by $1.7 billion over the next 18 months, detailed in letters sent to commissioners this week, establishes a new way of tabulating the budget for city agencies.

In a marked departure from tradition, the mayor’s office added the cost of fringe benefits, like employee health care and Social Security contributions, to the agencies’ individual budgets. But the agencies are not responsible for those costs, which are paid from a central budget at City Hall.

The seemingly small change in accounting makes job cuts, either through layoffs or attrition, an especially efficient way to reduce spending and meet tough new financial targets, City Hall officials and budget watchdogs said. It also suggests that the city work force, now at 305,000 employees, may face its first significant reduction in recent years.