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It’s a spending problem

Nov 25th, 2007 by Nelson Benton

The latest issue of MassINC’s CommonWealth magazine has a good article on the fiscal perils facing Bay State communities. Residents of Salem, Gloucester and Lawrence, all of which are dealing with significant deficits these days, might want to take note.
Unfortunately author Gabrielle Gurley devotes too much space to municipal leaders’ whining about how they need to raise more revenue, and too little to the root cause of the problem — too much spending.
Then Gov. Mitt Romney raised a good point in a meeting with Eagle-Tribune editors several years ago when he noted how cities and towns continued to award their employees raises and benefits far exceeeding 2.5 percent despite the fact the total amount they can raise via the property tax is limited by law to just that — 2.5 percent.
Where did they think the extra money would come from?
Of course, the state has been complicit in feeding the spending habit by funneling increasing amounts of aid to cities and towns. Perhaps it helps salve the conscience of lawmakers whose constant pandering to the public employee unions has allowed police, firefighters, teachers and others to extort health-insurance and pension benefits from mayors and selectmen that are far in excess of the norm in the private sector.
What’s the average citizens to do? There’s just one thing they can do — say no to increased taxes. They’ve been doing that consistently on requests for general operating overrides, and everyone in government better hope they’re not mad enough to vote for elimination of the state income tax should that initiative petition make it to the ballot next year.

Posted in Local politics, Nelson Benton, Pension Tidal Wave, Uncategorized | Comments

  • jacrlsn
    Well said and to the point, Mr. Benton. I should warn you however, you are beginning to sound like me.
  • Scott
    Give it up!

    Week after week the Tribune runs another hit piece on unions. We get it! Police, Firefighters, and Teachers don't earn their salaries. I thought the Tribune was in the business of reporting the news.....not creating it!
  • jacrlsn
    Boy, Scott, the shoe must really fit. You apparently missed the point - too much spending-.
    I challenge you to point out one thing that Mr. Benton said that was incorrect, I don't think you can.
  • Scott
    Jim,

    I'll start with the term "extort", do you really think that is a fair characterization? Public employee like myself (yes, the shoe fits) are not immune to inflation. We like you have experienced higher costs in our households. By the way, that includes our property taxes as well. As for the assertion that the unions are bargaining (or is it extorting) for contracts in excess of 2.5 per year. Did the author care to factor in, higher employee contribution rates towards health care? I think not. Most public employee unions would salivate at a net 2.5 increase. Where do a sign?
  • jacrlsn
    Scott, thank you for a courteous response. Unfortunately you seem to have picked one word in Mr. Bentons blog and because he may have used it incorrectly, used that word to try to cast doubt on the rest of his writing. I'm sure that you recognize that he wasn't using it in the legal sense- only a lawyer or someone in law enforcement would dare do that.
    Although I can't speak for him, I'm sure he meant that the unions actions have been used only for their memberships good and not for the public good. I should point out that the first 12 years of my working career were spent as a union member and I have a great deal of respect for unions. Unfortunately I think union managements have emulated non-union management techniques and as a result for the last 20 years or so, negotiated more for their own benefit rather than their memberships. That is not to say they didn't benefit their members but rather that was a secondary result of what they have done. Now to your response. I think you missed the point, Mr Benton first pointed the finger at lawmakers "whose constant pandering to the public employee unions has allowed... to extort... ." What do you suppose he meant by that?
    Yes I think the author factored in higher employee contributions toward health care premiums because for the most part there have been no increased employee rate of contributions because the unions have refused to renegotiate the subject.
    I am confused by your last stement that"most public employee unions would salivate at a net 2.5% increase. What are you referring to?
    Sorry Scott, but your assertions do not coincide with the facts as they exist.
  • Scott
    Jim,

    I disagree with you that most unions have not renogotiated health benefits over the past several years. I assume we are limiting our discussion to local unions (Merrimack Valley). Having researched the matter personally, I can tell you most unions are contributing signifanctly more than they were just a few years ago. To give you an example my contibution rate has doubled over the past 3 years, during that time the premium itself has gone up on average of about 10% per year. That being said, I am fortunate to have a good health care plan at a reasonble cost. With respect to the comment I made about a net 2.5% increase I was refering to cost of living wage increases. My point with respect to the blog was that I felt the the author was conveniently leaving out union concessions (such as health care) and leaving budget problems at the feet of union members.
  • jacrlsn
    Scott, your comment that most local unions in the merrimac valley have seriously increased their contributions to health care premiums is the first time I've heard such a claim. Also, I assume when you say the unions have, that you mean the union members. I'm not aware of any unions that provide such coverage until recently when the United Auto Workers apparently assumed that responsibilty at least for retirees.
    I think I'm going to take a time out to do some research on this. If you care to share any of your research, I would appreciate it. Even the names of the towns/cities would be helpful. Beverly is also supposed to begin negotiating an increase in employee contribution. but it a very small increase and spread out over, I think, 3 years. If my memory serves me correctly it 5 percentage points over 3 years.
    If you do choose to help me, you can send the info to my email address, jcarlson45@gmail.com.
  • jacrlsn
    Scott, I have been unable to verify ANY negotiated change in the ratio of employer/employee contribution to medical premium payments in cities or towns IN MASSACHUSETTS. As I mentioned in my last post, the City Council in Beverly has authorized the Mayor to negotiate a 5 percentage point increase ( I believe its to raise the employee contribution from 5% to 10 %, but I don't believe its happened yet.) in that cities employee contribution.
    Please let me know the specifics of your doubling employee contribution rate. What were the percentages involved?
    And what city or town is it? If your not comfortable posting it here, please let me know by e mail at jcarlson45@gmail.com.
  • Scott
    Jim,

    As an example, I'll give you the City of Lawrence. Three years ago employee contribution rates went from 10% to 20%. During that same period the premiums themselves have increased on average of about 10%.
    In fairness, a 20% contribution rate compared to what some may be paying in the private sector is fairly generous.
    But if you would put yourself in the shoes of a public employee for a moment. Lets say your earning $700.00 a week and your weekly health care contribution is $70.00. Every year the premium itself increases by 10% (state average). which means your employee contribution is now $77.00. effectively reducing your net pay by 1%.
    Now consider that given prop 2.5 you as a public employee are not likely to see a cost of living increase in excess of 2.5%. As a public employee you can only hope that inflation will stay under that number.
  • jacrlsn
    Scott, Thanks for the prompt reply. I was not aware of the change in Lawrence's cost sharing, and I commend them for having the guts to pursue the change. You are correct however, in that employee sharing at 20% is VERY generous when compared with the private sector. Also is that where it stops? If you would think of yourself as a taxpayer only, you might understand our viewpoint more. That, I know is difficult to do given that you are both.
    Are there any other cities or towns that you can name that has done an increase in employee cost sharing?
    Your anaysis leaves out any cola in the base salary. Was the omission intentional or inadvertant? In relation to that, it should be pointed out that cola's are rare in the private sector even when unions are involved. So if you factor in a cola increase in the public sector, it makes it even better in comparison to the dreaded private sector. In your example, any cola in excess of !% would result in an increase in net base pay.
  • Scott
    Jim,

    I would disagree with you that cost of living increases are rare in the private sector. Most (private) well run professional organizations have a system in place which calls for an annual review. Based on performance, employees are awarded increases that range from a simple cost of living increases (for marginal employees) to merit based increases (for exceptional employees). Of course, this is all based on the performace of the company as a whole. If the company is doing well the employees benefit, if the company is doing poorly the employee's suffer.
    Conversely, employees in the public sector (regardless of merit) are likely only to experience COLA increases. It should also be noted that COLA increases are not a given. The union I am part of has been forced to accept more than one 0% increase over the years.
    To answer your question.......As I recall, the year the City of Lawrence raised employee contribution rates the union employees received a 3% raise. By my calculations thats a net 2% increase. Now, is that unreasonable?
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