NIFA Freezes Raises, Declares Crisis, Says Budget Still Not Balanced
On Jan. 26 of this year, NIFA declared a control period in Nassau, assuming direct authority over the county’s budget. After that declaration, County Executive Edward P. Mangano led a legal effort to fight the takeover, which resulted in a court-ordered stay of the takeover until a 29-page legal decision from New York State Supreme Court Justice Arthur Diamond allowed the control period, and the county subsequently announced this week that it was dropping any further action. As a result of that decision, Mangano was forced to submit a new budget that eliminated what NIFA found to be a $176 million deficit. In order to do this without raising taxes, the county executive submitted plans to NIFA on March 22 that included major layoffs, cuts in services and pay furloughs. On March 18, the county executive requested a “wage freeze” or suspension of any pay increases to county employees. This required NIFA’s consent and would save over $10 million.
At NIFA’s meeting last Thursday, March 24, its first since the control period was declared, the agency’s board members discussed both Mangano’s legal claims against them and his newly submitted budget. They enabled a one-year wage freeze by declaring a fiscal crisis in the county. They also determined that the new budget was still not balanced according to their standards.
First. the group rejected the county’s claim that NIFA created the illusion of a deficit by changing accounting rules. Chairman Ronald Stack said, “The deficit is real. The deficit is substantial. It is not a NIFA deficit. It is not a ‘paper deficit.’”
Stack went on to explain that the board felt that the new budget was “still not balanced.” The NIFA chair said that, “virtually all items are unacceptably fraught with risk,” either requiring changes in state law, actions by the county Legislature, or needing more backup and verification.
The board did declare a “fiscal crisis” in Nassau County, thereby allowing the wage freeze, which ordered that, “all increases in salary or wages of employees of the county… are suspended.”
NIFA’s resolution stated that the agency sees the wage freeze “…as a less harsh alternative to further layoffs and cuts.”
Mangano’s Budget Cuts
The new budget in question, which Mangano submitted last week, cuts over 500 positions, imposes a 13-day furlough, in which employees lose a day’s pay each pay period as well as the wage freeze.
Mangano said that his administration projected a 21.5 percent property tax increase would be necessary to fill the $176 million deficit without major cuts in spending. At a press conference, the county executive did not hide the gravity of the situation.
“Since the last thing Nassau families need in these tough economic times is a double-digit property tax increase, I have cut government spending,” he said. “This first round of cuts will affect every area of the county and the services we provide.”
Mangano said that the revised financial plan surpassed NIFA’s requirement, offering $181.9 million in savings, including: $60.5 million in employee-related spending reductions, including: $50 million in savings from 213 layoffs, elimination of 307 vacant positions, implementation of a 13-day furlough for County personnel and the reduction of seasonal and part-time employees; and $10.5 million in savings by calling on NIFA to freeze employee wages and longevity pay.
Other major savings were expressed in $17.7 million from the reduction of contractual expenses; $15 million from the restructuring of the police department, including the redeployment of 142 sworn officers and as many as 41 civilian posts to optimize the force and alleviate overtime requirements; $4.5 million from ending the county’s relationship with the MTA to run Long Island Bus service; $4.5 million from the privatization of inmate healthcare; and $3 million from the reduction of overtime at the Nassau County Correctional Center.
As stated, NIFA did not view the new proposal as satisfactory. Others critical of the budget cuts included unions and the county executive’s opposition in the county’s Democratic minority.
Democrats complained that if cuts were made earlier, the ramifications would have been less drastic.
“Think of it this way,” offered Legislator Wayne Wink, “If you have to save $12 this year, and you save a dollar a month, that is a lot easier than starting mid year, when you now have to take out $6 or $8 all at once.”
Wink and Deputy Minority Leader in the Legislature Kevan Abrahams spoke at a press conference, where Abrahams said that their caucus, led by Minority Leader Diane Yatauro, believed that before cutting vital bus service and other health and human services that are crucial to society, the county executive should have cut millions of dollars in contracts, like those with his old law firm, that they suspect have less benefit to county residents. They also said that they are looking into their suspicion that, after imposing a hiring freeze, the county executive hired 125 new employees.
Of course, county unions were also unhappy with the news. CSEA Local 830 President Jerry Laricchiuta said, “It is a sad day.” One concern he and others are questioning is the legality of the pay furloughs, for one. His union has 6,500 members working for Nassau County.
Regarding unions, NIFA’s resolution stated that its members felt it was right to force county employees to face the reality of a deficit, saying, “…the size of the… deficit faced by the county in 2011 make some contribution by labor toward a resolution entirely appropriate. Labor leaders have expressed publicly that they have little desire to grant concessions to the county that would provide budgetary relief… Wages and benefits to the county workforce account for nearly one-half of the county’s annual budgeted expenditures.”
