In Your Corner

The cost of our local governments is largely driven by personnel costs that account for as much as 94% of local operating budgets. While much has been said about the $100,000+ salaries being paid many County employees, the long-term cost of benefits, retirements and loss of management control is even higher. Benefits have historically been very generous for government workers. In the past, they were paid less than their civilian counterparts and relied on better benefits and long-term job security to recruit qualified applicants and retain employees. This was particularly true for jobs considered “hazardous duty” such as the military, law enforcement and firefighters. This is no longer the case.

The US Bureau of Labor Statistics Report of 2008 provides some interesting and detailed information that indicate personnel costs as well as direct pay in state and local governments are both significantly greater than those in the private sector.

Cost of Benefitsper Hour Worked: Private Sector Local Governments

Health & Life Insurance $2.29 $5.07

Paid Leave $1.78 $3.17

Retirement/Pension Plans $0.95 $2.97

Disability Payments $0.10 $0.70

Total Cost of benefits $5.12 $11.91 (+232%)

Direct Compensation $21.66 $26.61 (+22%)

Total Hourly Compensation $26.78 $38.30 (+43%)

The key point here is the significant difference in the hourly costs that lies both in insurance, paid leave and pension costs as well as direct compensation.All of this data supports the contention we have repeatedly made to our County’s leaders: government workers no longer lag private sector employees in either pay or benefits and this has been the case for a number of years in our area. To control costs and still be competitive in the market place human resource managers must not only compare wages and benefits to other government entities, but also to the local private sector. Communicating this to our elected officials as they determine future pay and benefits for county workers in both non-union and union jobs is a vitally important factor in keeping costs in line. In essence, the time is long overdue for our elected leader to address this issue and seize the opportunity to use the current economic conditions as a logical way to address fiscal responsibility without unduly penalizing employees.

Where union contracts exist there should be a concerted effort to try and renegotiate the relevant portions of these agreements. This may not be possible, so all administrations’ goal should be to employ an experienced, unbiased professional labor negotiator in order to bring future contracts in line and limit the county’s long-term liability. When it is impossible to reduce these civil service personnel costs governments have to look seriously and honestly at privatization of public services. These could possibly include items such as the operation of the jail, parks maintenance, school transportation and food programs, ambulance services and project reviews. We have suggested many times that a multi-year budget process for all local governments would also be helpful in this cost reduction process.

  In summary, there is clear evidence that the cost of government at all levels is increasing far beyond the ability of taxpayers to provide the funds to support it. There is a very profound quotation that succinctly covers this situation: “Governments cannot give anyone anything they do not first take from somebody else”. When local government employees are being paid significantly more than the population taxed to support them, the situation is not sustainable. Your Taxpayers’ Association is embarking on a communications program to awaken the general public and hence our elected officials as to the imbalance that currently exist in many areas of our local governments.