By Eden Laikin
A story in Newsday this week acknowledges the huge fiscal challenges facing Nassau County now and in the not-so-distant future – much of which the media outlet points out – have been spurred a state takeover of the County’s finances.
The biggest challenge, however, according to Newsday? Contractual union raises coming due to employees, and significantly higher pension and health insurance costs for 2012. These generous contracts and benefits were negotiated by the former County Executive, and pose a $115 million hurdle for Nassau in 2012 alone.
Currently in Nassau, civilian employees earn an average compensation of $121,000 including salary and fringe benefits, while law enforcement earns an average of $180,000 annually in compensation.
Here’s the story by Newsday:
August 16, 2011
MORE BILLS COMING DUE;
Union raises pose $115M hurdle for Nassau; County: ‘Everything on table’ in budget talks
BY ROBERT BRODSKY; With Celeste Hadrick
Nassau County, after struggling with budget cuts and layoffs spurred by a state takeover of its finances, is bracing for a new challenge because of tens of millions of dollars in union wage and benefit increases set for next year.
Minimally, the higher labor tab includes $72 million in higher pension and health insurance costs, said Brian Nevin, spokesman for County Executive Edward Mangano.
In addition, the county also faces $43 million in salary increases in 2012, bringing the total to $115 million. If the Nassau Interim Finance Authority, a state oversight agency, chooses to freeze the regularly scheduled wage increases, that tab could be smaller.
But not all of the $43 million could be frozen. Some of the total comes from salary increases that were deferred in 2009 at the height of the nation’s fiscal crisis by then-County Executive Thomas Suozzi and the county legislature.
While officials said they could not break out how much was deferred, Nevin said that compensation would not be affected by a NIFA freeze. The board declined to comment.
The tab comes due at a precarious time. The U.S. economy is troubled and the county’s finances remain under NIFA’s control. Nassau recently laid off 128 workers and has a projected $225 million budget deficit in 2012.
The labor costs will rise through the end of 2015 when contracts for each of the five county employee unions expire. Until then, Nassau officials say they will consider all options to balance the budget.
“Everything is on the table as County Executive Mangano works with NIFA to present his second consecutive no-property-tax increase budget,” Nevin said.
County officials did not say how much of the boost in pension costs results from an expected increase in the contribution rate set by the state. The county also did not detail the amount of health insurance expenses go to retired county employees.
Will officials keep freeze?
After months of sniping, Mangano and NIFA declared a cease-fire last week. In a joint statement Thursday, they said they would work together to solve the county’s fiscal woes.
At the time, the county cited a figure of $163 million in labor cost increases for 2012. But Nevin revised that Friday to as much as $115 million.
It is not clear if NIFA, which froze salary increases for all unionized county employees this year, saving $10.5 million, will keep the policy into 2012 or beyond.
“I would not speculate on any one thing in the budget,” said NIFA board member Christopher Wright. “We need a full and complete picture of all the elements in the budget.”
Nevin declined to rule out asking NIFA to extend the pay freeze through 2012. Labor costs represent 50 percent of the county’s budget, he said.
The unions have filed a court challenge to the freeze, which extends through March 24, 2012.
The first union wage boost kicks in Nov. 1 when the 6,500 members of the Civil Service Employees Association get a 3.75 percent raise. An identical increase for CSEA members is set for next April.
The county’s law enforcement employees also have contractually mandated raises.
Members of the Police Benevolent Association are due a 1 percent step increase in 2012 and top pay will rise by 4 percent. Police will receive an across-the-board 3.5 percent pay increase in 2013 and 2014, and a 3.75 percent increase in 2015.
Similar rounds of raises are also in store for members of the Sheriff Officers Association, the Detectives Association and the Superior Officers Association.
Unions uneasy about pay
Union officials are concerned they won’t see those raises.
“As long as NIFA stays here, I suspect they will keep our wages frozen,” said Jerry Laricchiuta, president of CSEA’s Local 830. “This union is under attack. It’s unfair and it looks like the only answer is to cut the pay of employees.”
The average cost per employee in Nassau, including salary and benefits, is $144,000. County law enforcement personnel make an average of $180,000, including salary and benefits, Nevin said.
Tim Sullivan, Nassau’s deputy county executive of finance, says the average annual pay for civilian employees – including salary and fringe benefits – is $121,000 for workers paid out of the county’s general fund. Those employees include correction officers and commissioners and executive staff, as well as those represented by the Civil Service Employees Association. In citing the $121,000 figure in a story on Tuesday, Brian Nevin, spokesman for County Executive Edward Mangano, did not elaborate on the different job classifications used in the salary calculation. Civilian employees are paid an average of $121,000 including salary and fringe benefits, he said.
The union contracts were signed in 2007 and 2008. But by March 2009, Suozzi asked for major changes to delay some of the scheduled raises. He declined to comment for this story.
At the time of the deferrals, sales tax revenue in Nassau was at its lowest point in 20 years and the state was making huge cuts in the county’s share of financial aid. Meanwhile, demand for county services was increasing, Suozzi said at the time.
The deferred compensation came as part of a deal to save Nassau money in 2010, when the county – $100 million short in projected 2009 sales tax revenue – was desperate for budget relief.
The county legislature, including Mangano, then a legislator from Bethpage, voted for the deferrals.
CSEA deferred seven months of wage increases for 2010 and 2011, saving the county roughly $14 million in total, the union said. Civilian county employees are scheduled to receive their deferred raises in 2014 and 2015. The increases will be in addition to raises already scheduled for those years.
Similar rounds of deferred increases are scheduled for three of the county’s four law enforcement unions next year.
Wage deferrals for the Sheriffs Officers Association do not kick in until 2014 and 2015. Deferred salary raises paid in 2011 from the two police funds totaled about $7 million, budget records show.