Budget Realism Local officials, employees are hopefully getting the message
Hartford Courant Editorial
December 20, 2010
Tonight, the Hartford city council holds a public hearing at 7 p.m. in the Municipal Building on proposed changes in the city's pension plan that should have been in effect long ago.
For years, city employees have been able to hop aboard the pension gravy train at ridiculously early ages — as young as 38, if you start working for the city at 18 — because they can retire after 20 or 25 years of service no matter how old they are.
The lax retirement and pension rules have cost the city a lot of money. Hartford ends up paying people with expertise they have gained at the city's expense to use it working for someone else. The incentive is to leave, not to stay.
Changes proposed by Mayor Pedro Segarra would change all that.
The Mayor's Proposals
Under those proposals, non-union city employees hired after the first of the year could not retire before age 55 and would not be able to collect a full pension until age 62.
Those retiring between 55 and 62 would get reduced benefits.
Pension payments, moreover, would be calculated at 1.75 percent (instead of the current rate of 2.5 percent) of final average salary, multiplied by the number of years worked. So if an employee works 20 years and earns $50,000 on average at the end, he would get a $17,500 yearly pension under the mayor's proposal, instead of half his pay under the current pension plan.
Another change would eliminate the ability of non-union employees to exchange accumulated sick time for years of service for the purpose of calculating retirement benefits. That sweetheart deal should be negotiated out of union contracts as well. Sick time should be for sickness. Short-term disability insurance can cover workers who need more time off more cost-efficiently.
The city council should pass the mayor's proposed changes in the pension plan for non-union employees and similarly tighten up the retirement benefits for union members in contract negotiations. Pensions in the public sector have gotten out of hand.
Governments shouldn't be paying retirement benefits to people in their 40s.
Lots Of Zeroes In Contract Packages
The recession of the past few years has turned longstanding bad practices — such as fattening retirement benefits — into crises. Finally, government officials and employees are beginning to get the message.
In West Hartford, the teachers' union has agreed to a wage freeze. The two-year contract, announced Dec. 9, gives neither a general wage increase nor a "step" raise for seniority the first year. In the second year, about half the members of the union get a 2 percent raise and others get a "step" raise just for staying on the job a long time, no matter how the teacher performs. Longevity payments are another bad habit that should be phased out.
In Bloomfield, the teachers union agreed to a wage freeze for the first year of a three-year contract. It also agreed to an insurance co-pay increase of 17.5 percent in the second year of the contract and to 18 percent the third year.
New Haven school principals agreed to a wage freeze and no step increase in the first year and to pay a greater share of health care costs.
And Trumbull's teachers' contract also has a wage freeze in its first year and 6.2 percent total salary increase over three years. The current contract, which expires June 2011, had given teachers an astonishing 24.5 percent increase over the last four years.
David Brooks, the conservative op-ed columnist for The New York Times, recently reported that state and local workers earn, on average, $14 more per hour in wages and benefits than their private-sector counterparts.
Government workers should get fair, competitive wages and benefits, but not over-the-top compensation that taxpayers can't afford.
Reprinted with permission of the Hartford Courant.
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