Judge blocks employee benefit cuts in NY county

The decision stems from the County Legislature's May enactment of law authorizing County Executive Edward Mangano to "take any and all actions he deems necessary" to generate $40 million in budget savings. Among the list of actions specifically authorized by the statute, the executive could "reduce or eliminate [the] employer contribution to employee benefits" -- which would have been a big change, since Nassau County employees currently contribute nothing at all to their health insurance premiums.

The county's Civil Service Employees Association (CSEA) challenged the law on the ground that it would permit an unconstitutional impairment of union contracts -- and U.S. District Court Judge Arthur Spatt agreed.  Unfortunately, the text of Spatt's order is not posted online, but as reported in Newsday (subscription required):

Spatt, in his decision, wrote, "Bargaining units such as the CSEA can no longer represent their members in any meaningful way, now that any negotiated provision they have endeavored to secure in the past can instantly be reduced to a nullity."

He also wrote, "The law gives the power to the county executive to unilaterally modify the terms of negotiated, written contractual bargaining agreements. This far-reaching power -- a power which appears to the court to be unprecedented -- can arguably be itself a substantial impairment to a contractual relationship."

In other cases -- including recent one involving a state financial control board's actions in Buffalo, New York -- federal courts have allowed state and local authorities to address fiscal emergencies by freezing public employee salaries. Indeed, Nassau's own control board has implemented a temporary pay freeze for county workers. But the courts have distinguished between pay freezes and actual reductions in pay or benefits that employees are already receiving. Two years ago, a federal judge in Albany blocked then-Governor David Paterson from effectively cutting the salaries of state workers through employee furloughs that had not first been negotiated with unions.

Nassau, one of the nation's largest and wealthiest counties, has serious financial problems -- thanks to a combination of generous long-term contracts, stagnant tax revenues and enormous debts piled up to repay court-ordered refunds of property tax over-assessments. Nassau's current labor contracts run through 2015; assuming Spatt's ruling is not appealed, the county's only route for attempting to abrogate those contracts would be through a federal bankruptcy court.

However, despite Mangano's continue failure to win meaningful concessions from the county's powerful unions, no one is using the "b" word in connection with Nassau.  Yet.