Members of SEIU Local 521 are making unreasonable demands of San Benito County. Those are their decisions to make, but I hope they take the time to consider a different perspective. The county presented 50 pages of detailed financial information concerning its precarious condition and lack of recurring revenue, and there has been no substantial dispute of that data.
Employee costs are the overwhelming portion, 67 percent, of the county budget, and county healthcare costs have exploded. Four years ago, the county cost for active employees’ health insurance averaged $5,760 a year; it is now $9,312. The union rejected a tentative agreement where the county would pay $6,600 annually for each employee-only health plan – $12,600 for each employee plus one plan and $15,780 for each family plan, tax free. These are generous benefits.
The situation with retiree healthcare costs has been even worse; the healthcare trust contains $82 million, but it still has a $37 million deficit. Additionally, the county has not put any money aside for lifetime healthcare of its current employees. Retiree healthcare costs are now more than $1,200 a month – or $14,000 a year each.
CalPERS is projecting that pension contributions will increase 44 percent over the next seven years from 14 percent of payroll to 20 percent of payroll. SEIU is the only county bargaining unit not paying any pension costs. There are eight “bargaining units” counting elected officials. Five are paying their full 7 percent or 9 percent share while two are paying 4 percent. However, the SEIU has paid nothing toward retirement.
The union rejected a tentative agreement that would have phased in the employee 7 percent CalPERS pension payments share as 5 percent for one year and an additional 2 percent in year two. The county has been paying both employer and employee shares for SEIU members.
Due to rate increases and salary creep, the current $1.8 million “Miscellaneous Employee” pension costs are projected to go to $2.9 million by 2019. It is unreasonable for SEIU employees not to pay their fair share of pension costs while other employees do.
Unfortunately, employees cannot spend raises in benefits where and when they need it most. Both the employees and the county are “insurance poor.” Now SEIU members face significant reductions in take-home pay just to pay for their share of pension and healthcare costs, but the pension portion is a holdover that was not implemented with the other employee groups.
I do not doubt those who tell stories of financial difficulties, but employers cannot pay based on personal financial condition. The average wage of county SEIU employees is $50,200. On average, SEIU members receive another 50 percent ($25,342) in rollup benefits and 21 percent ($10,895) in fixed benefits for a total average of $86,438. It is true that they do not walk home with anything like that, but how to take compensation is a choice they have to make and they decided to take much of it over a lifetime – but it is still compensation, paid for by the county.
I believe that both the SEIU members and the county would be much better off if there was a severe reduction in the insurance costs. But to do that requires a significant change in retiree health agreements, so both sides are stuck. The county has to find the financial resources to hire more help to fulfill its primary mission – public service. Based on the county’s recurring income level, there is really no choice but to reform the pension and benefit payments.
