'We need courage and urgent action'

Menino calls for unity, wage freeze for city workers

Mayor Thomas M. Menino delivered his annual State of the City address last night at Faneuil Hall. (Globe Staff Photo / Barry Chin)

Mayor Thomas M. Menino called on city employees last night to accept a one-year wage freeze to help fill a budget gap and avoid layoffs, declaring during his annual State of the City speech that the economic crisis requires "urgent action."

A wage freeze would save the city about $60 million, which would erase nearly half of the city's looming budget gap, officials said yesterday.

Officials in Menino's administration had warned Monday of possible widespread layoffs of police officers and teachers, setting up the mayor's high-profile request last night for union concessions that could stave off some of those cuts. He did not say how many layoffs could be averted with a wage freeze.

"If we can agree to a one-year wage freeze, then I can protect core services for residents and preserve jobs," Menino said, speaking to friends, political supporters, and grim-faced city officials in a 25-minute speech.

"I know this will be hard on working families," he said, "but the way I see it, a one-year wage freeze beats core service reductions and painful, painful layoffs."

Police, fire, and teachers' union officials either declined to comment or could not be reached last night. If the unions agreed, the wage-freeze would prevent teachers and police officers from receiving scheduled raises of up to 3.5 percent next year. Firefighters are currently working without a contract.

Light applause from a crowd that included Governor Deval Patrick, House Speaker Salvatore F. DiMasi, and city councilors followed the call for a wage freeze. Spectators filled Faneuil Hall's historic Great Hall last night, which has a capacity of 1,000, and about 150 people packed an overflow room where they watched the speech on television screens.

Outside Faneuil Hall, about 60 students and supporters, mostly from Boston Latin School, held signs and chanted to urge city officials to spare funding for the arts and extracurricular activities at the school. School Superintendent Carol Johnson greeted the students on her way into the mayor's speech.

"These are the programs that keep kids off the street," said Kijana Rose, a Northeastern University student from Roslindale who graduated from Boston Latin and joined students at the rally.

Menino took time out to recognize the death of veteran fire Lieutenant Kevin M. Kelley in the crash of a ladder truck Friday. Menino attended a wake for Kelley yesterday evening before arriving for his speech, and he asked for a moment of silence in Kelley's honor. Michael Ferchak, the intensive care nurse who witnessed the crash and rushed to help the firefighters in the truck, attended the speech and was publicly thanked by Menino.

Even as Menino grapples with an economy in a downward spiral and a $140 million budget gap, his political future seemed to be on his mind as he officially kicked off the new year. At the end of his prepared remarks, he hinted he is preparing to run for an unprecedented fifth term, promising to "work tirelessly to move our city forward this year and in the years ahead." Menino's current term expires at the end of 2009.

But it was the economy and its effect on city revenues that dominated last night's speech. He said he had visited construction workers, hockey parents, and small business owners recently who all described how the economy is hurting them.

"I understand how they feel," Menino said. "Whether it's at your kitchen table, or my desk, the numbers are not pretty."

Menino said the anticipated $140 million budget shortfall threatens gains the city has made in education, public safety, and neighborhood development.

"This is no ordinary year, but ours is no ordinary city," Menino said. "We are confronting a great economic crisis. Boston did not create it, but Boston must deal with it. Together, we will overcome it. The problems are truly global in scale, but they are also very, very real in our city."

He said his administration was searching for efficiencies in how City Hall operates and was asking the state for additional revenue sources, such as the ability to levy a meals tax. But that would not be enough, he said.

"We cannot tighten our belts out of this situation, no matter how much we prioritize, legislate, and consolidate," he said. "We need courage and urgent action."

Menino did not say the wage freeze would avert all layoffs. Even with the anticipated savings it would provide, the city's 2010 budget would still be about $80 million short.

The mayor said the city was working to protect residents during the economic crisis, touting his efforts at foreclosure prevention and intervention. The city, he said, has prevented nearly 450 foreclosures, keeping 500 families in their homes.

"Street by street, block by block, we will do even more this year," Menino said.

Given the city's dire financial straits, Menino refrained from announcing major new initiatives, but he did announce a $1 million gift from The Cloud Foundation that he said would allow 2,000 city students to work directly with art and science professionals.

Councilor at Large Michael F. Flaherty, who is considering running against Menino, offered an alternative list of 11 cost savings yesterday that he said should come before layoffs. The proposals included working with state lawmakers to require currently tax-exempt colleges and universities in the city to make substantially greater payments to the city than they already do.

Councilor at Large Sam Yoon, another potential mayoral candidate, was skeptical of Menino's proposal to freeze wages across the board and said he wanted more details from the administration.

"Working families and breadwinners who are the most vulnerable to this economy should not bear the entire burden," he said.

In an interview after the speech, the mayor said the drastic step he proposed may be unavoidable in the current economical climate.

"We can't just cut around the edges," Menino said.

One fiscal watchdog said the mayor's request for a wage freeze is responsible, considering the current economic climate, but may not be received too well by public sector unions, who may choose layoffs instead.

"There's an old adage about unions eating their young," said Samuel Tyler, president of the Boston Municipal Research Bureau, a business-funded organization. "I don't think past history would indicate there'll be a willingness to do this."

Donovan Slack of the Globe staff contributed to this report. John C. Drake can be reached at jdrake@globe.com.