Suffolk County Executive Steve Bellone, who during his re-election campaign said he did not expect to impose a lag payroll in 2016, now says he will defer $11.5 million in salary to county workers because the union would not agree to his proposal to suspend payments to its benefit fund for one year.
Deputy County Executive Jon Schneider said a letter will be sent Tuesday to 6,000 white- and blue-collar county workers saying the lag, which will cost an average of about $2,100 per worker, will be reinstated. Under a lag payroll, workers will defer 10 days of pay over a 20-week period, starting in March or April. The money will be paid back when workers leave their county jobs.
The union had agreed to a pay deferral in either 2015 or 2016 as part of its most recent contract with the county. Bellone last fall said his budget did not include provision for a lag payroll. However, the county executive did budget $12 million in savings, expecting an agreement with the union on an alternate way find the money.
Bellone proposed that the union suspend an $11.5 million annual payment to the benefit fund, which has $24 million in reserves, to make up for the temporary savings a lag would provide. He said the county would have guaranteed that the reserve would not fall below $12 million. The fund pays for employee benefits including dental, vision and some legal services.
Brian Macri, president of the Association of Municipal Employees, said he was “a little startled” at Bellone’s decision, saying he thought the “dialogue was still open.” He said Bellone aides had refused to consider other options the union put forward.
Macri said the union’s 38-member board of directors had rejected Bellone’s proposal by about a two-thirds vote in October, meaning it would not go to the union members for ratification.
The board opposed the suspension of benefit funding, seeing it as a permanent loss, while a lag payroll would only delay the payments.
The union leader said that as an alternative, the union was looking for the county to permit deferral of vacation or overtime, such as several other unions had done. Schneider said he was unaware of any alternative union proposals.
Macri also said the county overestimated potential savings from the benefit fund. He noted that unions for probation officers and community college white- and blue-collar employees also use the Association of Municipal Employees benefit fund but are not covered by the same contract.
Schneider said the lag would affect about 4,800 people and average about $2,415 in delayed earnings. He said the administration will file legislation that would implement the lag payroll for the approximately 400 exempt employees who are political appointees. They are in the benefit fund, but not covered by the union contract.
Legis. Kevin McCaffrey, leader of the GOP caucus, said he understands the union’s reluctance to permit use of reserve funds because “a health fund can go bad real fast” because of unexpected claims.
Presiding Officer DuWayne Gregory said, “The decision to tap AME’s $24 million reserve fund in order to avoid a lag was the result of a negotiated agreement between the county executive and union leadership. Because the AME board has now rejected the deal . . . it is now incumbent upon the board to propose an alternative that is acceptable to its members.”
Also, in an executive order Friday, Suffolk County Executive Steve Bellone declared a state of fiscal emergency for the fifth year. He directed county departments to set aside up to 10 percent of expenditures in certain accounts, and gave himself controls over hiring by other countywide elected officials. The county faces budget deficits as sales taxes lag expectations and police salaries increase under contracts negotiated by Bellone. The 2016 budget relies on more than $100 million in one-shot borrowing and property sales, despite increases in fees and police district property taxes.
With David M. Schwartz