Nassau County is broke, with $3.5 billion in debt and annual budgets in deficit for the foreseeable future. The county has no workable way to raise more revenue from an overtaxed populace and no way to cut spending that won't be deeply painful.
That's why the Nassau Interim Finance Authority imposed a wage freeze in 2011 on all county workers that will have saved about $230 million by the end of 2013. But now we are led to believe that Nassau County Executive Edward Mangano and Police Benevolent Association president James Carver, who have been negotiating since February, have found a magical formula that lifts the freeze, makes the cops whole and saves the county money.
Over time, the deal would restore all raises and reimburse wages lost to the freeze in 2011 and 2012. It would give the county's police raises agreed on in their current contract for 2013, 2014 and 2015, but delay them six months. And it would extend the contract two years to 2017, with raises of about 1.7 percent in each of those final two years. This would evaporate the $79 million the wage freeze has saved on police pay, and nearly every penny the freeze would save going forward.
In return, newly hired cops would contribute 3 percent of their pay to their pensions, a figure rising to the state maximum of 6 percent as their pay increases. While Albany enacted a new pension tier, Tier 6, in 2012 that requires all new public workers to contribute, a little-known provision in the statute exempts workers hired under an existing labor agreement. The county will not capture this pension savings for new hires until this contract runs out or is extended.
Mangano and the PBA have said all new hires would have to pay for 15 percent of their health insurance, but that's not what the proposed contract says. It specifies that they would pay 15 percent if they choose the current, gold-plated coverage, but could still choose free health care under a less generous plan. This would save the county 15 percent for some officers, but not, as advertised, set a precedent of requiring cops to pay for part of their insurance.
The county has some 2,200 unionized members of its police force. With 500 expected to retire in the next few years and the same number to be hired, these pension and health care modifications would be substantial. The proposed contract has additional police concessions: changes to how time off can be taken, a slight slowing of how quickly top-salary grade is reached, and civilianization of about 50 positions. These, too, would save millions of dollars per year in pay and overtime.
Remember, however, that the average Nassau officer earns $160,000 a year with overtime and differential pay for various shifts. The standard workweek, when holidays, vacation, sick time and other wrinkles are added in, is about 28 hours. Retirees get full health benefits, a pension and often a separation check that can be worth hundreds of thousand dollars.
However, the deal being offered isn't good enough for taxpayers, because the county's rationale for accepting it doesn't hold up.
The ability of NIFA to impose the wage freeze is being contested in court. And absent a deal that ends all litigation, the minute NIFA lifts the wage freeze, the county's unions are likely to start another lawsuit to determine whether workers accrued years on the pay scale during the freeze.
If the courts rule that NIFA had no right to impose the county-wide freeze, the $230 million or so it has saved would be owed to workers immediately. A judge could possibly order that the money be repaid with 9 percent annual interest. If the unions sue again and win the argument that workers accrued years on the pay scale during the freeze, their pay would skyrocket.
Eliminating these dangers through a contract extension that gets the unions to drop all claims is the primary reason Mangano gives for accepting this deal. But arguing for a deal that would give workers every penny they lost during the freeze because the county might lose a court case is weak. The county might win and owe nothing. Meanwhile, as the litigation drags on, the unions under the freeze might become more willing to give back a little more to the county.
And Nassau would probably get much of the savings from police that it has touted anyway. The latest Suffolk County police contract includes concessions similar to those proposed in Nassau. Suffolk serves as a benchmark when Nassau's deals are negotiated and arbitrated.
There are no immediate savings in the proposal for Nassau. In fact, in the short term, it would blow another big hole in the budget. For the police, it's a great deal. It would give them raises and back pay that they risk losing forever, impose benefit contributions only on cops not yet hired, and tinker only with their work rules and future pay and benefits.
The police contract is expected to set a pattern for other public unions already negotiating with Mangano to end the wage freeze.
Necessary approvals of modified labor contracts from the members and the Nassau legislature are likely to be easy.
It's an election year, after all, organized workers are known to vote.
But the taxpayer wouldn't get enough out of this. It's the public that can't afford it. Every day, the freeze saves the county money and makes Nassau workers itch more for a deal to thaw the freeze. Only NIFA, which must approve a new contract and lift the freeze, is in the way. It needs to reject this deal.
The county needs to wait and negotiate a better offer. It can't afford not to.