NIFA extends county wage freeze for 1 more year
Nassau's financial control board Thursday extended a county wage freeze for another year despite a federal-court decision -- now under appeal -- that found the agency does not have the power to suspend pay increases.
The 5-0 vote by members of Nassau Interim Finance Authority came after the U.S. Court of Appeals Thursday agreed to expedite the control board's appeal of U.S. District Court Judge Leonard Wexler's ruling last month.
That means the appeal should be decided before January, when another round of contractual salary increases for union employees will take effect if the freeze is not upheld.
The county comptroller estimates the freeze will save the county another $115 million this year -- on top of the estimated $80 million saved since it was first imposed in March 2011.
However, the nearly $200 million in total savings likely would have to be repaid to county employees if the higher court confirms Wexler's decision rejecting the freeze.
James Carver, president of the Police Benevolent Association, said Thursday that the union will be "back in court against this illegal authorization of the wage freeze that Judge Wexler has already determined they don't have the authority to do."
Jerry Laricchiuta, president of the Civil Service Employees Association, said NIFA is "acting irresponsibly. They are putting the residents of Nassau County and the workers in harm's way by creating a liability that would be in the hundreds of millions of dollars. This is a control board that is out of control."
Wexler ruled that NIFA's power to impose a freeze on contractual wage hikes and annual "step" increases expired in 2008, according to state legislation that created NIFA to monitor Nassau's finances. He delayed execution of his decision pending NIFA's appeal.
NIFA imposed financial controls in 2011 because of a looming county budget deficit. At the request of County Executive Edward Mangano, NIFA declared a financial crisis and approved a one-year wage freeze in March 2011, and another in 2012. The current freeze was to expire March 23.
The county's unions challenged NIFA in federal court. Although Wexler's decision applied to a lawsuit filed by the county police, it is expected to cover all county unionized workers.
The resolution that NIFA approved Thursday noted that Nassau, even with the wage freeze, could close fiscal year 2013 with a cash deficit of as much as $41 million.
It also noted that a state appellate court recently rejected Nassau's attempt to shift the cost of property tax refunds to county schools and towns next year, a decision that could cost Nassau an additional $75 million to $100 million in annual operating expenses.
NIFA chairman Ronald Stack declined to comment Thursday because of the ongoing litigation.