A proposal by Mayor Michael Bloomberg to avert public school teacher layoffs has fallen apart at the negotiating table.
The mayor was prepared to stop some 5,000 layoffs, most of them teachers, if city workers agreed to pay out $220 million from a health care fund controlled by the unions.
Union leaders said they were prepared to turn over that money to help the city, but only if additional money from the fund could be used to help workers.
A spokesman for the mayor said Thursday the city had no choice but to reject the offer.
The spokesman also said the city is ready to negotiate a deal to avoid layoffs.
A budget deal is due by the end of June.