Marty: Language barrier

Public employees lament that their pay is going down and the
costs of their benefits are going up. Meanwhile, the employers
lament their costs of employment are going up and their ability to
supply services is going down. Unfortunately, both sides are
correct.
  One barrier to solving the budget problems is that public
employees and employers speak completely different languages.
Public employees lament that their pay is going down and the costs of their benefits are going up. Meanwhile, the employers lament their costs of employment are going up and their ability to supply services is going down. Unfortunately, both sides are correct.  One barrier to solving the budget problems is that public employees and employers speak completely different languages.

Employees speak take-home pay, personal expenses, and retirement security. When they get their check the first thing they look at is take-home pay and mentally run that against their personal expenses. The last thing they look at, if they even bother, is the box that shows the county costs of their employment. Even then, the employees are not going to extrapolate that to the entire payroll; everyone’s situation is different. 

Employers speak cost of employment, income limits, and levels of service. When they get the financial report the first thing they look at is total expenditures and mentally run that against their income. They never look at an individual employee’s take-home pay, even if they did they cannot extrapolate that to all employees because have no way of knowing how that stacks up against personal expenses; everyone’s situation is different.

A perfect example is recent cost of CalPers retirement for some county public safety employees presented to the county board of supervisors. 

From 2009-2012 the combined, employee and employer, costs to fund the future retirement of about 29 public safety personnel will reach $3.45 million. In those three years, the employees will have contributed a total of $357,000 and the county will have contributed $3.1 million.

In 2009, that employee group and the county negotiated an increased retirement benefit along with an increased employee contribution percentage to help cover the costs. Public safety retirement costs are somewhat higher than the typical retirement costs, but the healthcare costs discussed later are the same for everyone.

For the three years, the annual combined costs rose from $952,000 to $1.13 million to $1.39 million respectively. The employee portion wet from zero to $159,000 to $198,000. The county portion went from $952,000 to $970,000 to $1.2 million. Obviously, everything went up. The total cost, the employee contributions and the county contributions all went up in spite of the fact that the county reduced the payroll for that group by $300,000, or 3 to 4 employees.

A look at the healthcare costs shows a similar situation. In 2009, the single person basic healthcare premium was $482 a month and the county paid the whole amount. In 2011 that had risen to $548, a 13.5 percent increase, and the county still paid it all. That is a $792 a year increase in county cost per employee.

Family costs were higher. In 2009, the cost of the basic family healthcare option was $1,254 a month. The county paid $912, or 72 percent, and the employee paid $342. In 2011, the premium had risen to $1,426; the county paid $1,032 while the employee paid $394. The employee is now paying $50 more per month, but the county is now paying $120 more a month or $1,440 a year more per family.

As long as the costs keep rising faster than everything else does, that’s what you’re going to get. The only solution is to keep the total cost down somehow; that will result in more take-home pay and lower budget expenditures. Eventually all the costs increases and service reductions will be passed to the general taxpayers; but you already knew that didn’t you.

Marty Richman is a Hollister resident.