No quick fix
The truly frustrating thing about the situation described in the Bergen Record's special report on the high cost of public sector employees is that it is unlikely to change anytime soon.
Most informed citizens were already aware that serving as a teacher or police officer is not without its perks. Some might even have made their peace with the fact that they are constantly asked to dig deeper into their pockets to support the next pay or benefit increase for someone whose compensation already grows more rapidly than theirs does. What they might not know is how it got that way.
The writers at the Bergen Record have done a good job exposing the inner workings of a system permeated by union influence in which the individual taxpayer rarely gets a fair shake. As the problem is structural, the only real solutions are long term ones that involve a total overhaul of the system. And we know who will standing there to block that.
posted by Teaneck Blog @ 12:08 PM
13 Comments:
A few weeks ago on Roger Cohen's cable program "Meet the Leaders" Assemblyman Gary Schaer of Passaic noted that by the year 2010 a FULL 25% of the NJ State Budget will be devoted to pensions and health care for STATE EMPLYEES. The time is now to fix the system before the system runs out of money to cover all these perks.
Health care and Pensions "Perks"???
I agree that we need to fix the budget and spending but to deprive Police and Fire Health Benefits? There must be a answer that everyone can work with. A cop or fireman doesn't do 25 or 30 years sitting behind a desk. Most times he is putting his life on the line. To take away a well deserved pension is a slap in the face.
Why is it so hard for the general public to understand that cops and fireman pay about 8% of their salary into the state pension system? Why is it so bad that we collect our pension after serving the PUBLIC for 25 years? We risk our lives so that you can sleep better at night and you have the nerve to say we don't deserve it? Now granted this is Teaneck and we are not as busy as the FDNY, but don't we all burn the same, fire doesn't get as hot on this side of the river? Are the bullets not the same? WE ARE NOT THE ENEMY!!! Stop treating us like we are gouging your hard earned tax dollars.
I myself have no problem with the pensions owed to firefighters, teachers and police. They pay into the system, the state made the deal with them years ago and then reniged on their commitment to match the payments for several years. However, the health benefit issue is another matter -- and the public is getting robbed for the state legislature's and governer's lack of backbone. It's time for them to give back some of the negotiating tools they took from municipalities and Boards of Education that would enable them to deal with unions on a level playing field. John Q. Public gets caught in the middle, and ends up paying more property taxes as a result.
Seeking to control spending on public employees is an absolute necessity given the fiscal positions of the state, its municipalities, and the individual taxpayers. Given the way the system is set up, this is extremely difficult to do, as the Bergen Record is explaining throughout its six-part series. This is not about what recompense police officers, firefighters, or teachers ultimately deserve, nor is it all connected to the bravery and heroism they display, for which all residents are, no doubt, sincerely grateful. To bring that into the discussion is to confuse the issue.
This is an issue of economics and not of sentiment. Could a firefighter perform his duties properly if he weren't prepared to sacrifice his own health and welfare to preserve lives and property? No, no more than an accountant could do her job if she had not been trained in the principles of double-entry bookkeeping. A firefighter can only receive a pay and benefits package in-line with what the taxpayers of a given locale can afford to spend in order to attract suitable candidates for the job. Although fighting fires may seem to be a higher and more noble calling than auditing financial statements, the compensation for performing each job must be governed by the laws of supply and demand or the services will not be delivered efficiently or effectively. We have reached a situation where the proper functioning of the system is endangered by the power of the unions and past legislative mistakes. Change is necessary.
TeaneckBlog makes very valid points. Might I add that the unions have to also recognize the economic effects that will ultimately require towns and school districts to reduce the amount of positions they can support with the current system, simply because they can't afford it, and that will affect their fellow union members' jobs, working atmospheres, and (in the case of firefighters and cops), possible safety issues... they need to see the bigger picture, instead of fighting to retain turf that is slipping rapidly.
the unions have to also recognize the economic effects that will ultimately require towns and school districts to reduce the amount of positions they can support with the current system
Great point. At some point it becomes self-defeating for public employees to continue to stand there with their hands out. It appears we may have reached that point.
This whole situation calls to mind what has happening in the private sector over the past few years. With major carriers nearly bankrupted by the generous pay and benefit packages they granted to unionized employees, pilots and other organized labor in the airline industry have been compelled to make concessions in order to keep their employers afloat. A similar situation is unfolding in the auto industry with GM and Ford crumpling under the burden of large pension liabilities and the very generous pay and benefit packages the UAW has won in the past for its members.
I myself have no problem with the pensions owed to firefighters, teachers and police. They pay into the system, the state made the deal with them years ago and then reneged on their commitment to match the payments for several years.
It's true that the shenanegans begun by Christie Whitman in order finance her illusory 30% income tax cut, and which continued to one degree or another under DiFrancesco, McGreevey and Codey, are to blame for much of the difficulty the state is having in meeting its pension obligations. Even without those shenanegans, however, it is possible to look at the deal the state made and conclude it's out of whack with the realities of our times.
Yes, let's keep our end of the deal, as poor as it may be, to whatever extent it should be binding. But for new people coming in, and for whatever provisions may be subject to periodic renegotiation (are there any?), adjustments are in order.
As someone whose retirement is largely dependent on a 401K plan, I am not terribly impressed that cops and firemen pay about 8% of their salary into the pension system. Those with 401Ks can pay up to 10% (it may be 11% at this point), to a maximum of about $11,000 or $12,000. You don't have to contribute that much, but you'd be foolish not to pay at least 8% if not more.
Unlike the state pensions, moreover, what your employer puts in and what you end up with isn't guaranteed. And you can't even touch it until you're 59-1/2. So if I start working at age 22, I have 37-1/2 years to go before I can collect MY "pension." But apparently, I'm less entitled.
Teaneck Blog is right that this should not be a matter of sentiment. But it's hard sometimes.
"... this should not be a matter of sentiment."
What here hasn't been based on sentiment?
We in the private sector were part of a social contract: in return for their loyalty, employees who stayed at a firm would get lifetime employment, consistently rising salaries, and excellent benefits, including health care and pensions. Over the past few decades, every tenet of this agreement was abrogated: Employees are fired at will (and leave to other comapnies as they see fit), wages are tied to productivity, and the majority of benefits are now the employees responsibilty, requiring payment of premiums and copays, limited choices of physicians, and pensions based on employee contributions.
The public sector had its own social contract. In exchange for low pay, employees would receive excellent benefits, ample time off, salaries and promotion tied to seniority, a tenure system and work rules that protect employees and the ability to retire after as little as twenty years on a full pension.
Justifiably, public sector employees have fought for -- and received -- increased wages, which in many cases far exceed the average wages in the surrounding community.
But there has been no budging on the benefit side. Benefit costs have been spiraling, especially for health care and pensions. While wage settlements have "only" been a point or two above the rate of inflation, costs for benefits have exploded. Taxpayers -- the same ones who are seeing smaller paychecks and less job security -- are left to foot the bill.
We can no longer afford to pay the bills twice, covering our own health insurance bills and pensions, and those of our civil servants.
We need to see all compensation included as part of negotiations, not just wages. If inflation is 3%, we can't afford to provide more than 3% increases without factoring in the costs of wages AND all benefits. Public employees -- and their unions -- need to demonstrate far more flexibility in controlling total compensation costs by contributing towards pensions (and shifting to defined contribution plans), paying more for health insurance, increasing co-pays, shifting from indemity plans to PPOs and HMOs, and by changing work rules to allow greater flexibility and increased productivity.
Yet most of these are sacred cow negotiating stands that public employees are unwilling to consider bending on.
Our municipal governments and school boards must recognize that there is a third party to every contract negotiation: the taxpayers who will be told to pay the bill. Both sides must do whatever's possible to keep the growth of total compensation -- wages AND benefits -- which account for the overwhelming majority of our property tax bill, to levels that do not exceed the wages we must earn to pay for all this.
According to the referenced articles,” the average income-tax filer in Bergen County earned $80,423” while the average salary for teachers is $61,500. (Teaneck average earnings appear to be a touch lower while Teaneck teachers’ average earnings are a bit higher.) While this shows the average earner makes about 23% more than teachers for the county as a whole, it is not a fair comparison. Public school teachers, have at least a college education and often advanced degrees as well. If teachers’ salaries were compared to those with similar education in other fields or to other professional’s in Bergen County, I suspect the difference would be more striking.
An extreme example of this disparity can be seen in the statistic cited for Ridgewood. In one article it states, “The average Ridgewood classroom teacher's salary for 2004-2005 was $70,246.” That article does not mention that in 2002, the average earnings in Ridgewood were already $160,958.
Every page of the online series includes the following misleading statement, “Focusing on police officers and teachers, we describe a system that has produced $100,000 base salaries for the rank and file, generous pensions and no-cost benefit packages – all at a time when the private sector is going in the opposite direction.” It typifies the tone of the entire article. Rank and file teachers don’t have a base pay of $100,000. Even for the police, one’s definition of rank and file would have to be distorted to make the statement true. The articles focus on those who make the most, and ignore the newcomers who often can’t afford to live in the neighborhoods in which they work.
Property taxes are high, but the notion that teachers and other public employees should except less in pay or benefits to solve the problem only seems fair when the facts are distorted to make it look like they are overpaid.
Tom, Do Teaneck residents have the sole responsibility of redressing the imbalance? If Teaneck residents make even more money, do they have the responsibility to share a percentage with the teachers? Another question: do teachers work a full year? Don't they get off two full months a year? Many teachers work summer jobs (I can name at least three dozen). Should that compensation be added back? Isn't the day shorter than the average workday? Lots of other points that could be made.The bottom line: in a capitalist society, the market sets the price. If the market sees that qualified individuals are not applying, the compensation will rise.
"Do Teaneck residents have the sole responsibility of redressing the imbalance?"
No ... but then I don't understand what this has to do with anything I wrote. I made only a passing reference to Teaneck and only because this is the Teaneck Blog.
If Teaneck residents make even more money, do they have the responsibility to share a percentage with the teachers?
While I suspect I'm not answering your question, that is what income taxes are about. One could argue that property taxes also tend to be higher for those who make more money but it's not universally true.
The shorter work day is certainly arguable. It does appear that teachers are expected to spend a considerable portion of their non-work hours on work related activities. I am more inclined to agree that getting two months off in the summer is a significant benefit, but there are those who say that teachers are expected to use part of the summer break for work related activity as well. Then again I'm not sure whether any of that is relevant to the point either of us are trying to make.
Whether you believe teachers are overpaid or underpaid, do you really believe the Record series was attempting to present a fair and balanced portrayal of teachers or public employees compensation?
From your statement about the capitalist society it's hard to tell whether you think teachers are getting exactly what they should get as a result of market conditions or whether you think that the collective bargaining inteferes with out capitalist society and results in workers being overpaid. Perhaps you could clarify your view. I bet neither of the options I suggest really represents your opinion.
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