The MCTPA often refers to the disparity between our rate of local population
growth and the rate at which local government spending has increased. We
object when these two rates diverge, and government spending increases much
faster than population. Government officials report many reasons for this
disparity. We hear taxpayers want more services than they used to want;
modern technology costs more than old technology; and government salaries
must increase to compete with other governments, or the private sector. No
doubt there is some truth to these explanations, but there is also
self-serving rationalization. Two simple examples illustrate the
self-serving part of the problem.

First, most local government employees are part of the State of Florida
pension plan. This is a defined benefit plan in which retirees receive a
guaranteed monthly payment, with annual cost of living increases. For most
employees, after 30 years of service they can retire and receive 48% of
their highest five years average pay for life.

"Special" classes of employees, such as Fire/EMS and judges, can retire
after 20 years of service and receive 66% of their highest five years of pay
for life. Other special classes, including elected officials and senior
management, also receive better benefits than regular employees.  Employees
do not contribute to this plan.

This State pension plan is relatively recent. It originated with the
bankrupt Teacher's Pension Plan around 1970 that was bailed out by state
taxpayers by extending the new pension plan to more employees. Most cities
and all counties were forced to join. The new plan had to be bailed out
again after the 1990-92 recession, but it was healthy during the boom years
of the stock market.

Now the State pension plan is under-funded again, due to the current
recession, and increased contributions are required this year for each
government employee to keep the plan solvent. The Martin County
contribution (exclusive of constitutional officers such as Sheriff)
increased from $4,777,912 last year to $6,152,918 this year, or 30%.

Another example is health insurance. Over the past five years general
health insurance for County government has increased from $2,871,141 to
$4,703,268, or 64%. At the same time, employees' contributions have
increased 37.5%.

These are two examples of a significant upward expense "creep" for benefits
that are largely unavailable in the private sector. These benefits are
generally not valued at their true cost when public employee's pay scales
are compared to their private sector counterparts. Finally, everyone,
including the elected officials voting on budgets, directly benefit from
these programs. This is hardly an effective set of relationships for
cost-containment of government.

**

The County changed its budget review and approval process this year. During
the budget workshops, rather than reducing staff's recommended budget, a
majority of the Commission increased it by $7,500,000. Then during the
first public hearing on the budget, when it was clear three Commissioners
did not support the overall budget, the budget was broken into separate
elements for review and approval. On September 23, the Commission with 39
separate (and split) votes on different elements approved the County budget
for 2003/2004.

We expect our elected officials to reach consensus on the annual budget, or
to turn it down during the workshop hearings with specific directions to
senior management for appropriate alterations in order to reach consensus.

The new method of reviewing and approving the budget failed to produce a
single cost reduction. It appeared designed simply to obtain three votes
for the overall budget by breaking it into smaller pieces. The end result
is two Commissioners appear spendthrifts, and the other three ineffective
naysayers playing politics with our money. The budget review process in
Martin County is broken and badly wants fixing.