The Chief, October 1, 2010, Friday

The Chief

October 1, 2010, Friday

The Chief

Nassau: Forget Contracts, We’ll Set Worker Salaries

Unions Ready to Sue

Contracts? We don’t need no stinking contracts!

That’s the message Nassau County Executive Edward P. Mangano is sending to public-employee unions. His Taxpayer Relief Act of 2010, submitted to the County Legislature last week, would allow him to set salaries for employees represented by unions regardless of “any terms in any laborrelated agreement to the contrary.” The proposal says any cuts in pay should not be construed as salary deferrals or an “eventual retroactive pay entitlement.”

‘I Will Order Labor Savings’

“To balance our 2011 county budget, I will order labor savings from Nassau County employees,” he said in his transmittal letter accompanying his proposed budget, which was dated Sept. 15. The county’s five unions will have to make $60 million in concessions this year, he said.

Ryan Mulholland, a spokesman for Civil Service Employees Association Local 832, which represents about 7,000 county employees, said he believed that pay for union members would go up or down depending on the state of the county’s finances.

“It makes our contract pretty much worthless,” he said in an interview.

He and state CSEA spokesman Steven Madarasz said Mr. Mangano’s proposal would violate the Taylor Law, which governs relations between public employers and employees. The law does not include provisions allowing a public employer to unilaterally declare a negotiated contract null and void.

“It’s a blatant violation of the Taylor Law and the U.S. Constitution,“ Mr. Madarasz said.

“We don’t think there’s any way he can do it,” Mr. Mulholland said.

Mr. Mangano, who is caught be- tween residents who can’t afford tax hikes and a state-appointed financial control board that is ready to take over the county if he can’t bring the deficit below 1 percent of the budget, sees it differently.

Tax Increase ‘Unaffordable’

“The county can no longer meet the burden of labor contracts that exceed [inflation] by over $500 million collectively over the life of the contracts,” he said in a budget-summary document. “In aggregate, these wage and benefit increases represent a tax increase in excess of 60 percent. It is impossible for homeowners to sustain the future growth of the current labor agreements without substantial tax increases. The Mangano administration believes that at this precarious economic juncture, an increase in tax burden . . . is simply unaffordable.”

“Things like this have been tried in other places,” said Ken Margolies, director of organizing programs for the New York City Extension of the Cornell School of Industrial and Labor Relations. “More often than not when it gets to court they don’t succeed.”

Mr. Mangano told Newsday that he had hired national and local labor lawyers who “have provided us with the confidence that we can achieve these savings.” He said case law gives him the authority to require givebacks from workers with the County Legislature’s approval, but he declined to discuss his legal strategies in detail.

Mr. Margolies raised the possibility that the Taxpayer Relief Act might be a bargaining tactic. “He might be trying to use this as a way to get them to voluntarily make some concessions,” he said in an interview. “This has been happening around the country.”

Or, he said, the proposal might be a political strategy. “It may be popular with the voters, blaming public employees for the financial problems of government,” he said. This shifts the onus for the county’s financial problems from Mr. Mangano to the unions, Mr. Margolies said.

‘Not Interested in Givebacks’

The budget contains no propertytax increase. The Tax Foundation, a nonpartisan research group that advocates for lower taxes, says that Nassau’s property-tax burden is the second highest among the nation’s counties. Mr. Mangano plans to borrow hundreds of millions of dollars to give residents and businesses refunds of incorrect property assessments by county
officials. He also wants to shift the burden of refunding future inaccurate property-tax levies from the county to school districts and city governments, which receive much of the property-tax revenue but are not part of the county government. Their reaction has been negative.

Spokesmen for Mr. Mangano did not respond to requests for comment.

“We’re not interested in giving anything back,” Mr. Mulholland said, explaining that the unions had made $150 million in concessions last year. Workers received no raise in 2008, he said, gave back a contractual raise that was supposed to go into effect in 2009 and deferred their 2010 raise, he said.

“The PBA has done its fair share,” James Carver, president of the Nassau Police Benevolent Association, told Newsday.

Also, Mr. Mulholland said, about 750 employees retired over the past 15 months under various county and state incentive plans. Mr. Mangano’s budget calls for a 5-percent reduction in county employment, from 8,393 to 7,976.

Wide-Ranging Implications

Mr. Madarasz said the U.S. Constitution prohibits any impairment of a contract. “The ramifications of [Mr. Mangano’s proposal] are enormous,” he said in an interview. “It’s not just about labor contracts, it’s about any contract out there about anything.” The proposal could create a precedent for overturning business contracts, he said.

The county’s five unions settled contracts that run through 2015 with the former County Executive, Thomas R. Suozzi. Mr. Mangano narrowly defeated Mr. Suozzi last November in his bid for a third term; high property taxes and the deepening recession were key campaign issues. Mr. Mangano said the “county entered contracts with reckless disregard for residents’ ability to
pay and without regard to rising unemployment and disclosure rates.”

Nassau County’s situation is similar to that of Westchester, another wealthy, high-tax county that has been hit hard by the economic crisis. Westchester’s new County Executive, Robert P. Astorino, has also said its residents cannot afford another tax increase and is looking at laying off
hundreds of county workers to balance the budget.