Sunday, July 16, 2006

State Budget - Bergen Record - 1 of 6 - Can NJ afford rising costs?

Published in the Bergen Record, Sunday, July 16, 2006

Can N.J. afford the rising cost of teachers and cops?


We're grateful to our police officers. We count on them. We're proud of them.

Our state is going broke paying for them.

Same goes for teachers. We wish we could afford them, but we're having trouble.

We're having trouble paying for New Jersey's nearly 500,000 public employees. Especially at their current salaries and fringe benefits. Especially with New Jersey's property taxes among the steepest in the nation and rising.

Especially now that state officials have closed a $4.5 billion budget gap by raising taxes and cutting services while sidestepping the subject of how we compensate unionized public workers.

This isn't about bad guys -- crooked politicians or school superintendents with secret retirement deals.

No, police and teachers are working people. People we trust every day to prepare our children for the future. People whose job it is to step between us and harm.

But there are so many of them, and their unions keep beating town councils and school boards at the bargaining table.

If a corrupt politician dips into the town till, that's a problem. But pay every cop in town $100,000 and spring for family health benefits for every teacher and that's a path to financial ruin -- or a taxpayer revolt.

Check it out:
• $100K Club -- Police officers in northeast New Jersey routinely make more than $100,000 in total pay. They are among more than 10,000 government employees in New Jersey who earn that much, according to state payroll and pension records.

• Tops in cops -- Police in Bergen County are the best paid in a state that the federal Bureau of Labor Statistics says has the highest police pay in the country.
For example, Fairfax County in Virginia boasts higher household income than Bergen, but police in the Washington suburb make a lot less than police do here. The average cop in Fairfax made $75,000 in 2005, including overtime; their counterparts in Bergen made $20,000 more.

Viewed another way:

The base pay for a rank-and-file patrolman in New York City tops out at $60,000 after 5½ years. Patrolmen at the top of the pay scale in Bergen County often get more than $90,000 before overtime. Contracts already in place in many towns will push base pay past $100,000 in 2008.

Overdosing on overtime -- Overtime lifts police pay well above $100,000 in even middle-income communities. Police in Butler earn base salaries $10,000 less than many of their counterparts in wealthier areas of North Jersey, but they make up for it with time-and-a-half. Their average total pay in 2005 exceeded $100,000.

• Rewriting Genesis -- For police in Alpine and other towns, the week isn't seven days, but six -- four days on and two days off. The result is 17 extra days off a year, beyond holidays and vacation.

• Golden years -- Ridgewood police Sgt. Paul Gilard retired on June 30, 2005. His total compensation for the year was $187,115, including a retirement payout of nearly $130,000. He'll receive an annual pension of $73,000 for the rest of his life. He's 48 years old.

• Who's the boss? -- Police in northeast New Jersey often make more money than the folks who pay their salaries, a Record analysis found.
In 2004, the average income-tax filer in Bergen County earned $80,423. For the years 2003 to 2005, cops in Bergen averaged $85,028 before overtime, according to state pension records. There was greater disparity in Passaic County. Tax filers there reported average 2004 income of $54,980, while cops earned base pay of $75,064. (See "What people make" for an explanation of our analysis.)

"Property value is enhanced by good services," said Richard D. Loccke, a Hackensack attorney who represents many police union locals at the bargaining table. "There's an emotional outcry against police, and it's misplaced. Two-thirds of the tax levy is education. That has the biggest impact. Education is the 800-pound gorilla sitting in the room."

Above average

Teachers' salaries and perks have indeed grown as well, although less so than cops'. Teachers in The Record's circulation area earn an average of roughly $61,500. It usually takes teachers twice as long to reach the top of the pay scale, but once they arrive there, they, too, often make more than the average taxpayer.

• Head of the class -- In Bergen alone, 1,126 teachers, or 10 percent, earned more than $90,000 in 2005-06, according to state records. In the city of Passaic, an urban district supported largely by state income-tax dollars, 158 classroom teachers topped $90,000. In Wayne, 43 teachers earned six figures. And don't forget, most teachers get summers off.

• Safe and secure -- Tenured teachers in New Jersey are essentially guaranteed jobs for life.

Over the past 10 years, not one of Bergen County's 10,000 teachers has been fired via tenure hearings, the only process for involuntarily removing tenured teachers for inadequate performance.

The powerful New Jersey Education Association, the union that represents teachers in all but five New Jersey districts, has also successfully opposed performance-based merit pay.

• Healthy benefits -- The NJEA has stuck to a policy that taxpayers must foot the entire bill for its members' health insurance.

"Protecting health benefits is our No. 1 priority," said George Lambert, an NJEA field representative for Region 23, which encompasses northern Bergen County. "We've been very successful. There's no district in this region where members pay for health benefits. I don't see giving that up. Ever."

Great benefits are remnants of a time when government pay was low. To make up for that, public employers offered perks like free health insurance.

Let's just say salaries have caught up, while benefits remain as generous as ever.

More than 53,000 full-time employees of the state government -- 75 percent of the total -- are enrolled in a state health insurance program that provides free coverage for them and their families, according to Thomas Vincz, spokesman for the Department of the Treasury.

More than 125,000 local employees also get free health benefits under the program, with only a few kicking in toward family coverage, he added.

Private industry nationwide provides only 9 percent of its workers with free family health coverage, a study by the Kaiser Family Foundation found. The typical private-sector worker in New Jersey chipped in $2,400 for single coverage and $6,600 for family in 2004, according to the state Chamber of Commerce.

Unions supreme

Certainly, police officers and teachers are not the only causes of escalating taxes. Runaway spending is also caused by pay-to-play, waste and corruption, as well as shoddy and in some cases overpaid management.

But cops and teachers are the most prominent public workers in our towns. They're often the most numerous. They're usually the best paid rank-and-file workers. Their unions are the most powerful in Trenton. And they take a big slice of our property tax bill.

Their union leaders are skilled and persuasive.

"We are a very successful organization. I don't shy away from that," said NJEA assistant executive director Vincent Giordano. "What differentiates the NJEA from other unions? What makes us so successful? It's our ability to engage our members and our ability to meld their professional interests and their advocacy interests into an organization they believe is functioning on behalf of all their interests."

They are also unapologetic.

"Do you work around the clock? Christmas? Thanksgiving? Is somebody going to shoot at you?" said Michael J. Madonna, president of the New Jersey State Policemen's Benevolent Association. "When you leave to go to work you don't know if you're coming home. I don't want to be corny, but it's a fact. It's just what the job entails. The stress of the job."

Indeed, two officers were shot, one critically wounded, Thursday during a routine traffic stop in Egg Harbor Township.

Towns have found ways to pay for cops and teachers. Sometimes it's other workers who bear the brunt. Wayne, for example, has eliminated 26 positions in the past 12 years.

Usually, however, it's the taxpayer who gets the short end. Rather than cut services, most municipalities raise taxes. In the 93 towns of The Record's circulation area, property taxes surged 58 percent between 1995 and 2005. That's nearly twice the inflation rate for the New York metro area.

The state, too, has hit upon a formula of paying employees more and raising taxes to match. Governor Corzine's "deficit-closing" budget calls for a 9 percent spending hike partially funded by a rise in the sales tax to 7 percent from 6 percent.

To be fair, Corzine's budget increase is due in part to his commitment to replenish the pension fund, which former governors such as Richard Codey, James E. McGreevey and Christie Whitman didn't do in a meaningful way. Their budgets essentially saddled today's taxpayers with the tab for past promises to public employees.

In a poll conducted by The Record for this story, three out of four North Jersey residents said property taxes were too high. Property taxes were also cited as the single most important problem facing the state.

Lawmakers may be hearing that. This summer the Legislature is supposed to meet in special session to tackle property tax reform.

But some possible solutions remain taboo. Woe unto the legislator who so much as suggests that unionized government workers accept givebacks or otherwise help the state deal with its budget problems. When Sen. Stephen M. Sweeney, D-Gloucester County, proposed just that last month, he was accused of demagoguery -- by members of his own party.

Sweeney said, however, he expects that many of the same politicians who bashed him will be forced by circumstances to come around. He's pushing for the Legislature to discuss employee compensation at the special session this summer.

"A lot of my legislative colleagues agree with me but don't want to go through the nonsense I'm going through," Sweeney said. "But guess what? I'm still standing, still pushing, and you'll see a lot more legislators coming over to my way of thinking because taxpayers are demanding it."

Many factors pump up the state budget, but any attempt to rein in costs without addressing compensation is likely to fail.

"Public employee unions are a special breed that don't give up anything willingly, and anyone who asks them to becomes an instant pariah," said Ramsey Mayor Richard Muti.

Spiral of blame

How did we get to this point? Can we blame the workers? They're paid what government employers are willing to pay them. Can we blame the unions? They're doing what unions do -- protecting and promoting the interests of their members.

Trenton lawmakers aren't shy about pointing a finger. Despite flat or declining state aid to municipalities, they blame local officials.

Said Codey, a West Orange Democrat who's the Senate president: "Has the Legislature ever increased property taxes? I never voted to raise property taxes. I'm not a school board member. I'm not a mayor."

Agreed Sen. Robert Singer, R-Lakewood: "Mayors are trying to find any way they can to blame somebody else for rising property taxes."

It's true that mayors and council members have not held the line against growing compensation. Due to inexperience, lack of nerve or a genuine belief that public employee raises are more important than keeping taxes low, they haven't stuck together in the same way their union adversaries have. They've failed to offer a credible counterweight to union strength.

"The easiest thing to do in municipal government is to agree with all the loud groups and you'll be reelected and your taxes will continue to skyrocket," said Emerson Mayor Steve Setteducati.

But in the Record poll, 41 percent of respondents blamed the state for their swelling tax bills, making the governor and state lawmakers the top-ranked villains.

There's wisdom in their choice. State officials have made sure that in the delicate balance of contract negotiations, the police and teachers unions have a thumb on the scale.

State officials are the ones who established the Public Employment Relations Commission -- nicknamed PERC -- and gave police the right to settle contracts by binding arbitration, which routinely awards cops annual base-pay raises of 4 percent.

They're the ones who then enacted the "cap law," which limits the percentage municipal budgets can increase every year -- 2.5 percent, or 3.5 percent if a town council passes a special ordinance -- while the cost of health benefits grew 13.3 percent last year, according to the state Chamber of Commerce.

They're the ones who stripped school boards of the right to impose their last best offer on teachers in the event of a deadlock in contract negotiations, robbing taxpayers of an important negotiating tool without requiring anything from teachers in return.

They're the ones who created the State Health Benefits Program, which pays every cent of the health insurance for more than half the workers in the plan.

They're the ones who established a pension system that paid out $4.2 billion in benefits last year, according to the Division of Pension and Benefits -- up from $2.5 billion in 2000 and $1.8 billion in 1996 -- and then approved budget after budget that failed to fund those pensions.

They're the ones who in the past three years received $951,915 in campaign contributions from the NJEA, $329,425 from state trooper organizations and $218,495 from the state PBA.

So we have unions that look out for teachers and police and we have a Legislature that looks out for teachers and police and we have nobody with any real clout looking out for the taxpayer, who is now shelling out an additional penny in sales tax -- a 17 percent increase -- on top of a hefty bump in property taxes.

Corzine, in his somber budget address in March, called for non-unionized state workers to skip their cost-of-living salary increases this year, a cutback the Legislature approved. He also wanted non-union workers, most of them supervisors, to make a 10 percent contribution toward their benefits. Lawmakers didn't go along with that.

State Treasurer Bradley Abelow said those provisions were a foreshadowing of topics the Corzine administration planned to discuss with union negotiators when bargaining begins, as soon as this fall, for new contracts. Current contracts are due to expire in June 2007.

"The unions know full well the implications as far as how we'd be thinking going into upcoming contract talks," Abelow said. "We'll be talking about salaries, pension reform and a series of issues concerning health care."

By law, pensions can't be cut, Abelow said, and until bargaining begins, "not much can be done about salaries." He said he hopes the Legislature, in its special session this summer, passes laws against pension sweetening and other abuses.

"We hope they take a look at things they didn't want to tackle this spring," he said.

In the meantime, Corzine maintains a close relationship with the unions his treasurer says will be asked to make concessions in a few months. The governor's budget was so well-received by the public unions that three of them -- the NJEA, the Communications Workers of America and the American Federation of State, County and Municipal Employees, or AFSCME -- all chipped in to run a barrage of radio and TV commercials and a direct-mail campaign in support of its passage.

"It's unprecedented for the three unions to work so closely together, and the reason we're doing that is we all share the same concerns," said CWA spokesman Bob Master.

When members of public unions rallied in Trenton on June 19 in favor of the budget and its sales tax hike, Corzine told the gathering, "I will fight for you."

Sweeney, the business representative for an 800-member ironworkers union as well as a state senator, said that instead of firing up the crowd, Corzine should have been meeting with union leaders and asking them for concessions -- now.

"Governor Corzine was wrong for at least not asking them to come back to the table and be part of the solution," Sweeney said. "They say budget time is not the right time to do that, but of course it's the right time to do it. That's when we're dealing with finances."

Sweeney said there is plenty the Legislature can do in its summer session, such as raise the state employee retirement age to 60 from 55, increase medical co-pays for new hires and reduce the number of holidays for state workers.

"I told the unions they're going to lose those benefits," Sweeney said. "The Legislature and the unions created this mess together, so we should fix it together.

"I'm a union guy," Sweeney added. "A friend can tell you the truth."

No numbers

How much do the cops and teachers in your town make? Don't stress if you're clueless. You're in good company.

In the Record poll, the majority of 1,100 registered voters guessed way low. Just one in three came even close to what experienced cops are paid in their town.

For teachers, the results were even more striking. While correctly noting that teachers don't make as much as cops, almost all respondents said a fully experienced classroom teacher earns less than $60,000. In fact, a teacher with a master's degree at the top of the pay scale typically makes in excess of $80,000.

There's good reason for the discrepancy. It's not as if information on what public-sector employees make is readily available -- even though the law specifically says it should be.

The Record requested computerized payroll records from every town and school board in the 93 municipalities that make up the paper's circulation area. We received them from fewer than 20 percent.

Some towns balked at reporters' requests for electronic access, saying they kept the payroll records on paper. But when reporters visited a handful of municipal offices to take a look at them, the records weren't available. Other towns said they didn't have the information, that it was in the hands of contractors who process their payroll.

Even when the information is at hand, it's often confusing, if not misleading. Town councils pass "salary ordinances" that are written with a wide range, even though the person actually in the job makes the maximum. Contracts typically calling for a 4 percent annual raise for police also provide new patrolmen with scheduled salary adjustments, known as "horizontal increases," that can triple a rookie's pay in five years. Longevity -- derided by critics as the "breathing bonus" -- can add 10 percent or more to the pay scale for senior employees, but is often detailed separately from salary scales.

"The public has been deceived," said Washington Township Mayor Rudy Wenzel. "A patrolman who makes an $85,000 salary really makes $97,000 with all the add-ons."

It's no better in Trenton. Want to know what a state worker gets paid? The information is kept in two separate places, requiring two separate document requests. The state personnel department keeps payroll records, but overtime records are stored over at Treasury, which charged this newspaper $977 for the database.

What we found: Over the past three years, the state paid out more than $600 million in overtime.

Lacking this most basic payroll information, many of us haven't been able to make the connection between the checks we write to Town Hall and the extraordinary compensation public employees receive.

Uneven playing field

Local officials say they have little chance at the bargaining table to halt mushrooming costs. Police and teachers unions mine decades of institutional memory and peruse the details of recent and ongoing contract talks statewide. The PBA calls upon attorneys like Richard Loccke, who's compiled an impressive winning streak, while the NJEA has specially trained and battle-hardened field representatives available on a phone call's notice.

By contrast, town council and school board members turn over every three or four years. Many have little or no experience hammering out labor contracts. Some worry the public may think they're being too tough. Once the signs reading "Save Our Cops" or "Support Our Teachers" start sprouting on their neighbors' lawns, their resolve softens.

"If the Legislature can't stand up to the teachers union, what hope can a little local board have against them?" said Mark Bombace, president of the Ridgewood school board.

Unions know the advantage of negotiating with 566 separate towns and 593 different school districts around the state. The results are contracts so generous they would have been inconceivable a generation ago. So the unions champion home rule and squelch any talk of regionalization. Two years ago, when Emerson and Westwood talked about combining police forces, PBA members from around the region packed meetings to denounce the plan. The towns caved.

"The PBA made the argument that residents would see strange faces in the police cars," said Westwood Mayor Thomas Wanner. "Well, there are many residents that don't know the faces of the police force like they used to. They're too busy working, trying to pay property taxes, to get to know their police officers."

Binding arbitration hands the advantage to the police unions. Mayors, council members and labor attorneys hired by municipalities know that arbitrators are likely to award raises well above municipal spending caps and the rate of inflation. It's considered a victory when they can get the police union to settle at the negotiating table and thereby avoid arbitration, which can add $50,000 or more to their legal fees.

Arbitration also skews salaries for other public employees, said Wayne Mayor Scott Rumana.

"If you know the going rate [for police raises] is 4 or 4¼ percent, and you're fighting to get it below 4 percent, you're not going to turn around to the other unions and get them to agree to a 1 percent raise," Rumana said. "With the tools we're stuck with, we do our best."

Arbitration also encourages unions to engage in a practice known as "whipsawing" -- persuading one town to agree to a higher pay rate and then arguing to an arbitrator that a neighboring town has an obligation to pay equivalently.

"The whole negotiating process is slanted toward the upward movement of salaries," said Sen. Gerald Cardinale, R-Demarest.

Clout with lawmakers

It's not difficult to root out the source of union power. The NJEA, for instance, has nearly 200,000 members. According to its own figures, 93 percent of them voted in 2004.

So did their families. And their friends.

The NJEA has parlayed its sway with the Legislature into a virtual monopoly on education policy. In many cases, that's a good thing. In some cases, it involves protecting the union more than it involves protecting quality education. The most obvious cases are its resistance to merit pay and its defense of tenure job-protection rights, instituted in 1909.

"Tenure protects the bad and the mediocre. It protects the good, but they don't need protection," said Joseph R. Morano, an attorney with the Lyndhurst firm Scarinci & Hollenbeck who represents school districts.

Like the police, teachers play one town against the other. They can pressure a school board to relent on important issues like health benefits by playing on trustees' concerns about competitiveness.

"If you're looking for a job, where are you going to go? Not to the district that makes you pay," said Robert Baxer, a former Ramsey school trustee. "No district wants to be the first one that does it because they'll be losing out on hiring the best and brightest teachers coming in. And it would be impossible to get experienced teachers from another district."

If municipal officials feel any resentment over the untouchable status of public employees, most of them don't talk about it. They fear a backlash -- their words may come back to haunt them in an upcoming negotiation or election. Residents, too, hesitate to criticize teachers and police.

"What person is going to get up at a public meeting and say, 'Mr. Mayor, you're wise for doing that' when you have the chief of police saying he doesn't want to do that?" asked Alfred Murphy Jr., former mayor, councilman and school board member in Hillsdale. "Same with teachers. I had teachers come in with black armbands because we let people go. And that intimidates some people. Getting tough will cost you because the police and teachers are very effective at playing to the audience, the public."

Staff Writers Benjamin Lesser, Adrienne Lu, Monsy Alvarado and Maya Kremen contributed to this article. E-mail:

New Jersey governments are awash in red ink. But from State Street to town hall, no one is tackling the biggest reason for our fiscal woes – what we pay public employees.

Focusing on police officers and teachers, we describe a system that has produced $100,000 base salaries for the rank and file, generous pensions and no-cost benefit packages – all at a time when the private sector is going in the opposite direction.

We don't blame the workers. They're paid what government employers are willing to pay them.

We blame the people who established a system that's so one-sided that local governments can't get a break. Those governments sit down to negotiate contracts with police and teachers and it's game over before it even begins. The big losers in the process -- taxpayers. The series

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Plainfield resident since 1983. Retired as the city's Public Information Officer in 2006; prior to that Community Programs Coordinator for the Plainfield Public Library. Founding member and past president of: Faith, Bricks & Mortar; Residents Supporting Victorian Plainfield; and PCO (the outreach nonprofit of Grace Episcopal Church). Supporter of the Library, Symphony and Historic Society as well as other community groups, and active in Democratic politics.