Our local governments continue to accelerate toward financial crisis. Property values and sales are falling, sales tax and Impact Fee receipts are down and more “help” from the Florida Legislature appears inevitable. For those interested in how we got here, there are years of articles on our web site http://www.mctaxpayers.org/ covering the subject. However, it is time to quit pointing fingers and concentrate on how to solve the problems without overcrowding our schools, reducing necessary levels of service, or further degrading the local economy.

The first step is identifying those problems. We believe recent revelations about the very high percentage of local government’s operating budgets required to cover personnel costs (low of over 85% to a high of 94%) point to a root cause - excessive salaries, perks and benefits paid to many public employees. This is especially evident in the upper echelons, where double digit pay increases and benefits that may have been warranted for entry and mid level personnel are compounded year after year to all employees. The best evidence of this phenomenon is in the data released last week about the County’s civil servants paid over $100,000.00 in FY 2007. This year almost 10% of all County Administration employees had gross incomes that ranged from $100,000.00 to $171,000.00, plus generous benefits. Nearly automatic 5% yearly “merit” raises plus cost of living increases and other perks, such as selling unused vacation and personal time, have pushed the take home pay for many well beyond reasonable levels.

Of special concern is the Fire/EMS Department, where over one-forth of the approximately 265 total union and upper management personnel (70) were paid from $100,000.00 to over $164,000.00. Also, the current IAFF contract has two more 10% compounded yearly salary increases built in. Assuming no corrective actions and the same ratio and distribution of over-time by current employees, in October 2009 over 40% of all Fire/EMS personnel will be earning over $100,000 with the 6 Battalion Commanders earning $176,000 to nearly $200,000.00.

As we have said over and over, we appreciate the excellent work by all of our County’s staff and teachers, especially those directly involved in saving lives, teaching our children, and safeguarding our property. Martin County residents have an average personal income of $44,000. This is excellent relative to the national average of $33,000 and Florida’s $31,000. However, the recent increases in public sector earnings, especially at the higher salary ranges, are not sustainable, even here.

Given these reported facts are accurate and our assumptions are valid, what should County officials do? Our recommendations are:

• Use professional negotiators for ALL future union and senior staff contracts, especially the Administration’s pending union contract.
• Develop and adopt a 5-year budget updated yearly
• Set “cost-of-living-plus” maximum budget increases for every department.
• Delete all automatic pay increases not part of a negotiated union contract
• Institute new personnel policies that reward merit and responsibility using a valid performance measurements system.
• Phase out the practice of “selling” vacation and personal time.
• Exercise any option that might be available to open the Fire/EMS contract for renegotiation. As a minimum, bring in an unbiased outside consultant to address staffing, efficiency and scheduling.
• Evaluate the forward cost of current retirement and benefit programs and make the data public.
• Extend the Administrator’s 2008 “voluntary” withholding of salary increases for highly compensated employees for at least one more year.

We all observed what happened to preeminent US airline and automobile companies when personnel costs exceeded what could be sustained by their income. Pan Am, TWA, GM, Ford and others delivered excellent products and service, and were great places to work. However, when equipment is not replaced maintenance costs go up; when there is no income to allot for upgrades, obsolescence occurs or debt goes up. These lead to inefficiency, loss of competitive advantage and inevitably all involved end up suffering. Since governments have the power to tax and control competition, they can prolong the agony far longer, but no organization is immune from the laws of mathematics.