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Aug 11, 2009 6:53 PMPublication: The East Hampton Press

Lag pay program will cost the county more in the long run

Aug 11, 2009 6:53 PM

In what Suffolk County officials have described as an effort to help cover a $110 million budget deficit, the county in recent months has deferred paying the equivalent of two weeks’ salary to more than 10,000 county employees and public officials, saving about $25 million this year.

But it remained unclear this week what the long-term cost of the “lag” plan will be. Employees will recoup their deferred pay when they leave the county’s employment or retire—at the salary they are earning when they leave. That will result in an eventual higher cost to the county as pay rates increase in future years, officials said.

The lagged payroll, agreed to after negotiations between Suffolk County Executive Steve Levy’s office and all but one of the county’s employee unions, allowed the county to avoid 400 layoffs this year, officials said. The county has deferred employee payroll before, in 1985.

Dan Aug, a spokesman for Mr. Levy, said avoiding mass layoffs was the central reason behind deferring employee payroll. Mr. Levy is still in negotiations with the Suffolk County Police Benevolent Association, which represents about 1,100 police officers, to defer police payroll. That union is the lone holdout so far.

“The overriding factor was that the county executive didn’t want to cut jobs,” Mr. Aug said. “The lag payroll was something that, with sales tax revenues declining so dramatically, was an approach that turned out to be viable.”

Numerous county officials agreed this week that deferring the payroll will cost the county more in the long run, when employees eventually collect the back pay. But none was able to provide analysis of the program’s overall cost to the county.

Suffolk County Legislator Ricardo Montano of Islip voiced concerns about the long-term cost of deferring employee payroll.

“It may well be that we have just taken short-term money at the expense of future generations of taxpayers,” Mr. Montano said. “The bill is going to come due when the current county executive is no longer in office. I feel sorry for the next county executive, who’s going to come in and have to deal with this fiscal issue.”

An average member of the Suffolk County Association of Municipal Employees, the county’s largest union, working for the county and earning a salary of about $55,000, has seen a salary lag of about $2,100, according to Suffolk County Budget Review Office Director Gail Vizzini. At a pay rate increase of 2.75 percent per year, which Ms. Vizzini described as an “average” increase for union employees, the deferral would increase to $2,691 after 10 years and to $3,529 after 20 years.

But the variables involved in calculating a final bill are too great to accurately predict the total cost of the plan, officials said. Ms. Vizzini explained that employees leave county employment at different times and that pay rates change according to union contracts, which complicates efforts to give accurate estimates. “It’s a crapshoot when individuals are going to be leaving and what they are going to be paid,” she said. “There are too many variables.”

Still, Ms. Vizzini said the final bill “will be quite a bit more” than $25 million.

“Nobody doubts that it is going to cost more,” she said. “It is going to cost more than the $25 million in the long run, but the county needs the money now.”

“I would say nobody knows how to calculate it,” said Bill Faulk, an aide to County Legislator Edward P. Romaine of Center Moriches.

While all of the county’s 24 elected officials are participating in the program, there are numerous ways the funds could be repaid, depending on salary and length of service, according to a June fiscal impact statement filed with a resolution allowing elected officials to volunteer into the lag program.

The county’s 24 elected officials and more than 400 aides and office employees not represented by unions have also had their pay lagged.

Legislator Brian Beedenbender of Centereach acknowledged that deferring payroll will “save tax dollars” this year but eventually cost the county more later. As a county legislator, Mr. Beedenbender volunteered to defer $3,300 of his $86,000 annual salary. He would collect just over $4,400 if he remains in office until 2019, when term limits would prevent him from running again, and if he continues to receive a 3-percent salary increase each year.

“It’s not a gimmick,” Mr. Beedenbender said. “It spreads the cost out over time.”

In the future, the impact of the added cost will be softened when the economy recovers from the current economic recession, said Legislator Jay Schneiderman of Montauk, who also agreed to defer his salary.

“This gets us through this crisis,” he said. “The hope is there will be better years ahead.”

Sill, Mr. Schneiderman said the long-term cost to the county would remain unknown: “Do I know what it will cost? I really don’t know.”

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The members of AME never got a vote!!!!!!!!
By cush870 (31), east quogue on Aug 12, 09 9:07 AM
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