Opinion ID: 795813
Heading Depth: 3
Heading Rank: 3

Heading: The Wage Freeze is Reasonable and Necessary

Text: 26 With the above standard in mind, we hold the wage freeze was reasonable and necessary. The legislature and Board did not treat the wage freeze on par with other policy alternatives. According to the Act, the Buffalo Fiscal Authority was empowered to enact the wage freeze provision only if it was essential to maintenance of the City's budget. N.Y. Pub. Auth. Law § 3858(2)(c) (McKinney Supp.2006). We read this to mean the wage freeze must have been a last resort measure. Indeed the Board imposed the freeze only after other alternatives had been considered and tried. The Board first instituted a hiring freeze pursuant to its powers under the Act. Moreover, the City had already taken other more drastic measures including school closings and layoffs; in the four years prior to the wage freeze Buffalo eliminated 800 teaching and 250 teaching assistant positions. Only after these more drastic steps were taken and a finding that the freeze was essential was made, did the BFSA institute the wage freeze. 27 This discussion dovetails with the second question of whether a more moderate course was available to remedy the fiscal crisis. As noted, the alternatives to the wage freeze consisted of elimination of more municipal jobs and school closures, alternatives which clearly are more drastic than a temporary wage freeze. Thus, in light of the surrounding circumstances, we cannot say the state or the Buffalo Fiscal Authority acted unreasonably. 28 The temporary and prospective nature of the wage freeze underscores further its reasonableness. The Supreme Court instructs that the extent of the impairment is a relevant factor in determining its reasonableness. U.S. Trust Co., 431 U.S. at 27, 97 S.Ct. 1505. Here the impairment is relatively minimal. Under the terms of the Act, the temporary wage freeze must be revisited by the Board on an on-going basis to assure the freeze's continued necessity. N.Y. Pub. Auth. Law § 3858(2)(d) (McKinney Supp.2006). Further, the wage freeze operates prospectively. In this respect the present facts are dissimilar to U.S. Trust Co., a case that represents the paradigm of the type of protection that the Contracts Clause was designed to offer: protection to those who invested money, time and effort against loss of their investment through explicit repudiation. Local Div. 589, 666 F.2d at 642 (discussing U.S. Trust Co. ). The impairment here does not affect past salary due for labor already rendered or money invested. It only suspends temporarily the two percent increase in salary for services to be rendered. 29 In sum, the prospective and temporary quality of the wage freeze convinces us of its reasonableness. See Blaisdell, 290 U.S. at 447, 54 S.Ct. 231 (finding temporary nature of an impairment to be probative of reasonableness) accord Spannaus, 438 U.S. at 242-43, 98 S.Ct. 2716; Subway-Surface, 44 N.Y.2d at 112-14, 404 N.Y.S.2d 323, 375 N.E.2d 384 (attaching significance to the prospective characteristic of a law impairing public contracts); cf. Energy Reserves Group, 459 U.S. at 418-19, 103 S.Ct. 697 (finding as probative the temporary aspect of an impairing regulation in a private contract case). 30 The unions argue the wage freeze was unnecessary because other alternatives existed. Namely, taxes could have been raised or other programs and services could have been eliminated or burdened. We cannot adopt this position for at least three reasons. First, it is always the case that to meet a fiscal emergency taxes conceivably may be raised. It cannot be the case, however, that a legislature's only response to a fiscal emergency is to raise taxes. Also, defendants have shown that Buffalo had already increased City taxes to meet its fiscal needs, and it is reasonable to believe that any additional increase would have further exacerbated Buffalo's financial condition. Second, even if the state could have raised its taxes, appellants have not shown how any monies so raised would flow to Buffalo. Finally, on the undisputed facts of this case, we find no need to second-guess the wisdom of picking the wage freeze over other policy alternatives, especially those that appear more Draconian, such as further layoffs or elimination of essential services. See Blaisdell, 290 U.S. at 447-48, 54 S.Ct. 231 (Whether the legislation is wise or unwise as a matter of policy is a question with which we are not concerned.); Local Div. 589, 666 F.2d at 643 (noting that the court could have balanced alternatives to impairment, but concluding that [a]nswering these sorts of questions ... is a task far better suited to legislators than to judges); see also Sal Tinnerello & Sons, 141 F.3d at 54 ([I]t is not the province of this Court to substitute its judgement for that of ... a legislative body.).