The Jon Kaiman “Plan to Modify Wage Freeze”:

 A Review

Nassau County wage freezes imposed by NIFA, at the request of County Executive Mangano in 2011, 2012 and 2013, have saved the County approximately $230 million and has saved the County from financial insolvency.

In other words, instead of making additional spending cuts or renegotiating union contracts or raising property taxes, the County has saved its fiscal skin by taking $230 million from Nassau workers.

Because the County has not adequately addressed its projected operating deficit for 2014, it will have to request NIFA to impose another wage freeze in March 2014.

It is interesting to note, however, that ever since Nassau County PBA boss, Jim Carver, met with the Executive Deputy Secretary to Governor Cuomo in October 2013, NIFA Chairman Jon Kaiman has been desperately trying to get a deal done that would lift the wage freeze on police personnel in 2014.

Kaiman’s “Hail Mary” effort was described in a memorandum he distributed to NIFA board members titled “Plan to Modify Wage Freeze” dated February 4, 2014.

What was most remarkable about Kaiman’s rambling memo was that it did not contain any financial numbers.  That’s probably because PBA proposals do not meet the goal of being cost neutral.

Time and again the PBA has put on the table proposals that have been rejected because its rosy financial assumptions do not hold up when analyzed by NIFA staff.  For instance, in October 2013, a NIFA analysis of a PBA proposed Memo of Agreement revealed that the document was not cost neutral but would cost the County “approximately $240 during the term of the Multi-Year Plan with additional expenses continuing during an extensive period.”

In addition, PBA proposals always insist on counting police force attrition which is already included in the County’s operating budget.  Attrition savings cannot be counted twice!

Proposals work if the projected savings are equal to or more than the wage freeze in real dollars during the life of the proposal.  A proposal fails if it costs even a dollar more than the wage freeze saves.

Time and again when the math did not work, the PBA threw down intangibles on the table—like morale.  And that’s exactly what Kaiman resorted to in his numberless memo.  Given police minimum manning and the extraordinarily high overtime, and that median police compensation is higher than the median compensation of Nassau taxpayers, it seems unlikely that the police are depressed.

Furthermore, to suggest that the wage freeze “has had a serious affect on morale and is leading to a crisis scenario”, does not speak well of the policies of Kaiman’s boss, Governor Andrew Cuomo.  Lest one forget the Governor has supported a “0, 0, 0” position on wage increases for state employees.

For Kaiman to argue that his numberless proposal, if implemented, could lead to a “permanent lifting of the wage freeze” is ridiculous and legally impossible.  NIFA under its statute cannot commit not to impose a wage freeze.

Then there is the issue of the union lawsuits against NFA that argue the wage freeze is unlawful.  The PBA’s offer to withdraw its lawsuit and waive future litigation if a deal is struck is equivalent to giving sleeves off a vest.  The unions know the case law on wage freezes side with NIFA.

Finally, Kaiman’s latest “Hail Mary” pass—counting $8 million of very rosy projected fines from additional red light cameras—just doesn’t cut it.  In the unlikely event fines reach projected amounts, it would not be enough to fund the PBA proposal.

The Kaiman memo is ultimately all gibberish without numbers.  To get headlines and his photograph in the press, Kaiman is willing to capitulate and to destroy the public integrity of NIFA.

PREAMBLE

I had the privilege of serving the people of Nassau County as a Director of the Nassau Interim Finance Authority (NIFA), a New York State financial oversight and control board, for four years.  During most of my tenure as a NIFA Director, Nassau was in a control period because the County had failed to adequately address its fiscal deficit.

Since the NIFA control period began on January 26, 2011, the County has failed to stop illusory budget practices and to stop juggling money to keep on the budgetary lid.  Instead of managing fiscal realities, County officials have governed by finger-pointing, issuing rosy press releases and attending ribbon-cutting events.

As a result of the County’s incompetence, negligence and indifference, the NFIA staff projects operating deficits of $157 million in fiscal year 2015, $190 million in 2016 and $255 million in 2017.

A control period is a Draconian measure that a locality should wish to avoid and if it occurs, to climb out of as quickly as possible.  But not Nassau.  It prefers to defer tough decisions and blithely go along la de da, tomorrow is another day.

The Nassau County Mangano-Kaiman Watch is dedicated to exposing fiscal and political shenanigans of County and NIFA officials and to waging a genuine reform campaign to prevent fiscal catastrophe and to restore taxpayer confidences.