Moody’s Investors Service weighed in today on the nine-year contract deal reached by NYC Mayor Bill de Blasio and the NYC teachers union, the UFT, saying that while the agreement “could eliminate” fiscal uncertainty by paving the way for other outstanding labor contracts, it also comes at a “large” cost and relies on assumptions that may or may not come to pass.

Without the offset of the 18 percent wage hike included in the deal realized through health care savings negotiated by the administration with the UFT and Municipal Labor Council, which represents all city employees, this agreement “could increase future budget gaps to levels that would be more difficult for the city to deal with, especially during another downturn,” Moody’s warned.

The comments, which appear in full below, are Moody’s first blush reaction to the UFT deal. The service noted that the administration still hasn’t released all the details of the agreement, which has been approved by the union’s executive board and is scheduled to be voted on later this afternoon at a UFT general assembly meeting.

Moody’s will have more to say on the agreement when the next update to the city’s financial plan is released, providing more details on the “budgetary and investment impact of the proposal.”

Moody’s comments on UFT-NYC labor agreement. by liz_benjamin6490