Opinion: Reasons to be confident about NIFA
Since my appointment to the Nassau Interim Finance Authority eight months ago, I've participated in staff briefings, conference calls and meetings with Nassau County officials, attorneys on all sides, and union leaders. I have read local media and remain baffled, not by what is written, but what is omitted.
There is important information, especially about the 3-year wage freeze on county workers and NIFA's recent decision to lift it, that I hope will reinforce the confidence of Nassau County residents that NIFA is indeed working.
Although we have much work to do, Nassau County is now on the right track. It is important to know that our county has run a deficit for more than 10 years. Recent attention to Nassau's budget deficit is fair, but residents should understand that since 2009, it has been declining. One factor in the county's deficit spending in recent years explains how it treated borrowing.
Previously, when the county borrowed money, it was listed as "income," making it easier to display a "surplus." In reality, the county was operating a budget deficit. Can you imagine your family having an income of $100,000 yet you have expenses of $120,000 so you simply write yourself a check for $20,000 from your home equity line of credit and then call it "income"? The county no longer reports borrowing as income.
NIFA is working and here's how:
Since 2011, the finance authority imposed wage freezes that saved the county $230 million. The authority's decision to lift the wage freeze last month dramatically reduced county liability associated with legal challenges related to the freeze. The county risk was projected at more than $500 million.
NIFA's statutory powers and oversight have prompted Nassau leaders and country workers to tighten spending. In 2009, the county employed 9,177 workers; that workforce has been cut by 20 percent to roughly 7,200. New county employees will contribute toward pension and medical benefits, annual pay increases will occur on anniversary dates rather than Jan. 1, revised salary schedules will graduate to "top pay" more slowly, and restrictions will be placed on the use of vacation and personal leave, reducing overtime costs.
The concessions and savings associated with paying new employees a lower wage versus the top pay of a retiring employee -- also referred to as "attrition" -- would save the county more than $100 million over the next four years. Based on recent hires of 170 police candidates and plans to hire more before year's end, projected savings associated with attrition may have been low. When you combine the $230 million the county saved from the wage freeze of 2011, 2012 and 2013 with $100 million of projected savings associated with the concessions, the dollars begin to add up.
You can be assured that NIFA will review the consequences of all new contracts and initiatives with the goal of assessing the cumulative financial impact each would have on Nassau's bottom line.
The county's greatest assets, its residents and workforce, can rely on NIFA's commitment to use its powers over Nassau's budget to motivate elected representatives to take the necessary actions to balance our budget.
Paul Annunziato is a member of the Nassau Interim Finance Authority.