Sunday, October 17, 2010

MONEY MATTERS

 Finally the proposed 2011FY budget was delivered to the Council along with proposals for layoffs and furloughs to help limit raises in taxes.No mention was made about the stated of negotiations  and/or status of the contracts with various city unions.

When there was evidence that the city would be impacted by the economic crisis especially in 2009 the Administration through then City Administrator DaShields reiterated that there were ongoing negotiations. The public was never informed of their status.  However all that were signed included annual raises of various natures.

The 2010 FY budget required the elimination of various positions, some of which further crippled essential already understaffed municipal offices. We were assured that the city’s financial well-being would now be preserved.  There were no restrictions on raises guaranteed by existing union contracts.

Apparently in our local union contracts all divisions in a Department must agree on downward revisions of the contract otherwise he changes cannot be implemented. Thus if a Division consisting of two employees refused to be bound by furloughs then such action cannot be implemented.  Obviously reduction of contract required raises would also be impossible.

Legislation, in the local case Council Resolutions, could be passed mandating furloughs. That has in many localities but by the above contract clauses would be unenforceable in Plainfield. Perhaps that is why there were no such action in 2010.

It is worth noting that only the Public Workers and Administrative unions in his state are prohibited from striking. The Police, Firemen, and Teacher’s unions are exempt by law and do have no prohibition against calling for a strike*.

Councilor Burney in a recent blog expressed his solution the job and economic crisis

There is nothing new in his proposition. An across the board percentage wages give up. True last year the Council and the Administration supposedly did do an insignificant give back, that was showmanship not conviction. We have had elimination in low level essential jobs and vacant important civic positions.  But, give back of raises and of benefits is dependent on the Unions.

In many jurisdictions, there has been a cooperative attitude between the municipal unions, their leadership and the municipality. Apparently after over a year’s negotiations there has been no union consensus to do so. Of course we are in the dark as to what was on the table.

It is a years too late but Administration with Council Support must legislate an across the board furloughs plan as well as changes in  health care benefits. If the Union rebels and threatens strike action, counter act by eliminating the villain section  or its personal .Other  units  over the country have met the same problem  and  solved it  using Draconian methods,

If the unions of the two Departments essential to Public safety too refuses, then at least  fire them all. There is sufficient room for temporary replacement. Or, the Governor could enact a state of emergency, and institute Martial Law, That would bring in the National Guard and conscript the reluctant workers.

What I am advocating is Draconian measures in times of financial emergencies, It should be the "social" as in society, responsibility of everyone to help ameliorate the crisis not to put pressure on others,

Less the reader thinks that I am not affected by our present financial crisis and am so wealthy that I can ignore it. consider why it is a fact that my taxable income the past few years has put me in a level that made me ineligible for Homestead return funds. 

How did I maintain such an unfortunate state? By controlling lifelong expenses such as no Country Club memberships, no vacation homes ownership, no excessive Atlantic City trips, I was fortunate enough to accumulated a nest egg of enough IRA retirement funds that when combined with Social Security to plan a comfortable post working years existence And I also actively worked  and enjoyed it  full time until over 70 and part time to 2000.

Those IRA funds however are taxable when withdrawn. And, Federal laws require  based on life expectancy tables a minimum amount being withdrawn  each year .Unanticipated was the recession and the collapse of the stock market with  the bankruptcy of certain bell weather  corporations compounded by the skipping or marked decrease in dividends by others,

My anticipated income was no longer a valid figure. Add to these facts  that I could care for my wife at  home during the last few years of her debilitating medical condition only by selling assets.  The later not only was subject to increased income taxes but also raised my income level as if it were new income not the results of savings.

Not only last year and this coming year there will be no increase in my Social Security benefits, my  income level from selling assets resulted in a increase in my Plan B charges so that the  usable funds I received monthly was a true decrease from previous years.

If you think I am complaining,  perhaps I am but I am not asking for sympathy. However, I resent anyone demanding a contractual raise  when so many of us in all ages groups   are having to do with less,  And everyone has to cope  with the  cost of living which  keeps rising in part due to increased municipal costs..

* Police, firefighters and teachers are not subject to contract imposition, but all other state and local government workers are. (Gerard J. Meara/Star-Ledger Guest Columnist)


3 comments:

  1. It is a system that is much more than fair to a few . . . and totally unjust for the rest of us!
    And when this system finally grinds to a complete stop because of itself . . .LOOK OUT!!!!

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  2. Doc, I catch your drift as they say. I'd rather have city employees paid more today, but have them individually, or collectively through their unions, manage their retirement and healthcare benefits. Savings and investment are the key. If my IRA goes down I've got to tighten my belt. If the public pension funds go down, it isn't right to turn to taxes to make up for shortfalls. With healthcare, we know the system needs vast changes, but 99.999% of those changes are out of the hands of local government.

    Governments of all sizes, but especially municipalities, are clearly choking on long-term guarantees based on overly-optimistic assumptions about things of which they have no control. They've got to eliminate the X-factor so they can operate with what they can clearly see in front of them. One way to do this is to engage new compensation formulas that pay a fair labor rate, all costs of life considered, but shift the management elsewhere, at least to a government entity licensed to print money.

    There are huge costs to requiring cities and towns to be in what is more or less a business they can never control. Not only taxpayers are whacked over the head. So is the employee who loses a job out of the blue. Local government needs to do what it does best, which is not to be the guarantor of the retirement benefit obligation for former employees, who themselves would be better off in the long-run taking the money today.

    Future union contracts should free the city of its longterm pension and healthcare obligations. The cost will be higher salaries, but the savings will be greater for both the city and employees when city operations don't need to be bastardized to tame the X-factor and we can start thinking clearly again from year to year.

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  3. Doc...you worked hard..you saved and now you are retired...to many unions and politicians in NJ you are simply an ATM. Look how our own fair city of Plainfield was impressed with themselves for keeping the tax increase last year to less than 10%. Kind of like the bank robber expecting a thank you note for taking half the money from the safe. You live in a city where the Mayor throws away $20,000 and gets her feathers in a ruffle when the citizens question it and her political hacks stand up behind her. Graft, waste, corruption ...

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