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Teacher Contract Agreement Clears Significant Hurdle

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The tentative agreement between Mayor Bill de Blasio and the city's teachers union cleared a significant hurdle Friday, but some budget watchdogs are questioning whether a key provision of the deal, to cut health care costs, will actually work. NY1's Grace Rauh filed the following report.

The teachers' union contract agreement is a little closer to being enacted. On Friday, the leaders of the Municipal Labor Council approved the part of the plan they have a say over: the portion dealing with health care savings.

It is that part of the deal, however, that is generating a good deal of questions.

"There's a lot that we don't know about exactly how the health care cost savings materialize," said James Parrott of the Fiscal Policy Institute. "Undoubtedly, there will be a lot of changes in the way benefits, health care services, are provided."

The contract agreement is based on the assumption that the teachers' union will agree to more than $1 billion in health care savings, but the plan does not specifically state how they will be achieved.

Teachers have not been asked to contribute to their health care plans. Instead, there are a number of other proposals meant to save money that the union can consider adopting, such as centralizing drug purchases or having teachers obtain non-emergency care at less-costly facilities.

"It is about getting at the underlying growth of health care costs and trying to reform the system to reduce the costs and provide good quality health care at a lower cost," said Mayor Bill de Blasio. "We're convinced there's ways to do it."

If the union and the city can't agree on a way save the money, an arbitrator will impose cost-saving measures.

"It's an unusual plan, and so I am skeptical because it's an untested approach," said Carol Kellermann of the Citizens Budget Commission.

Then, there's the broader question of how the city will actually pay for the plan, which includes retroactive and future pay raises, without raising taxes or cutting services. On Thursday, the mayor is scheduled to release his executive budget proposal.

"I'm sure he'll have more optimistic revenue estimates than he's had in the past to cover some of it," Kellermann said.

Kellermann is concerned that the mayor will dip into money set aside for retired city workers to cover the cost of the teachers' contract.

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