Yesterday's Daily Courier had an interesting article on the compensation that Grants Pass provides city employees.
Pell, who owns Sunshine Natural Foods, was the vice chairman of the Josephine County Compensation Advisory Committee, created in 2004 to look at the county's wages and benefits.
"I am a concerned citizen and taxpayer who is fortunate to have a good job," Pell said.
"My biggest concern is that I believe the benefit packages to be unrealistically generous and are far greater than anyone, especially me, ever imagined them to be or that the city staff portrays them to be."
...
The city's budget shows the benefits-to-salary percentage for the top step of seven representative positions as of Jan. 1 of this year ranges from 66 percent for an office assistant I position to 49 percent for a treatment plant specialist. The office assistant I salary is $31,164 and benefits of $20,570 for a total of $51,734. The treatment plant specialist's salary is $48,960 with benefits of $23,978 for a total of $72,938.
David Reeves, the city's finance director, said the city's overall benefits-to-salary percentage is 54.29.
That's an eye-watering percentage.
"It is safe to say that the Grants Pass benefits were about 50 percent better, or more in the case of deferred comp matches, than the private sector respondents, keeping in mind that most mom-and-pop operations offer very little to virtually nothing in the way of benefits," Pell said.
One example from the private sector is the Daily Courier's newsroom, where the benefits-to-salary percentage is 25.
The city is required to pay Workers Compensation, Public Employees Retirement System and Social Security benefits, and this year, after suspending the practice for several years, the city is also paying employees' 6 percent contribution to PERS.
This year, for the city's seven representative positions, Grants Pass paid from 12.5 percent to more than 20 percent of the salary into retirement. That will rise by 6 percentage points in the 2008-09 budget, which goes into effect July 1.
The elective benefits are for life insurance, long-term disability insurance and health insurance, which provides medical, dental, and vision coverage for employees and their families. The employee pays 7.5 percent of the cost of whatever insurance plan he or she chooses.
Oregon's state and local governments are still paying a high price for those PERS losses earlier in the decade. And let's not forget the following regarding the Tier 1 employees (pulling forward a quote from this previous post)...
In August 2003, Oregon leaders changed pension rules for new public employees and tweaked benefits for those on the job. That has slowed increases in taxpayer expenses. Still, costs are expected to remain at record highs for almost a quarter-century, when workers hired under lucrative pre-2003 plans will be mostly retired and begin to die.
That guaranteed 8 percent return gives those employees the most lucrative state retirement system in the nation. Returning to the original article...
According to U.S. Bureau of Labor statistics from August 2007, only 71 percent of workers in the private sector have access to medical plans and just 61 percent have retirement plans.
While the city's benefits may be disproportionate compared to the private sector, they are pretty typical for the public sector.
For instance, Josephine County's ratios range from 42.9 percent for a legal/law library position to 60.5 percent for a building and safety employee.
And those types of numbers resonate across the country.
A recent national survey by a Wisconsin taxpayer group reported that public sector benefits are greater than those in the private sector in every state. The largest gap was in Oregon, where public benefits were nearly triple those in the private sector, according to the report.
Traditionally, government service was supposed to involve lower pay in exchange for better job stability and benefits. So many government employees whine about their pay, but...
CNNMoney.com on Tuesday reported that, according to Bureau of Labor statistics, the average pre-benefit wage of "public-sector professionals (including teachers and lawyers) was $31.51 an hour in December 2007, virtually identical to the $31.75 an hour for private-sector professionals.
"Public-sector service employees (including many blue-collar workers) averaged $16.72 an hour in salary, compared to $9.87 for private-sector employees."
The city's wages appear to be better than the private sector's as well.
For instance, the entry level salary for the city's office assistant I position is $23,244, and the top step is $31,164. Those duties are described as meeting the public, answering phones, filing, taking payments, handling complaints, arranging meetings and general office duties. By comparison, Oregon Employment Department labor market information for Josephine and Jackson counties list the mean wage for a general office clerk at $25,775.
A parks maintenance worker starts at $29,856 for the city and goes up to $36,288. That position's duties include mowing lawns, cleaning, inspecting and repairing parks facilities, maintaining irrigation systems, applying chemicals and landscaping.
Meanwhile, the OED report states the mean wage for groundkeeping and landscaping workers is $26,465.
...and the odds of those jobs offering healthcare and retirement benefits aren't particularly good.
While public sector wages certainly don't lag behind the private sector, the public sector benefits continue to climb at a time when the private sector is tightening its belt and reducing employee benefits.
Some argue that rather than reduce public employee benefits, benefits for the private sector should be boosted. While Pell doesn't begrudge the city employee benefits, he doesn't believe taxpayers can continue to support them.
"It's not a sustainable concept to continue those benefits," he said, noting that PERS costs continue long after an employee retires.
"They will eventually bankrupt us in much the same way that, left unchanged, PERS was going to bankrupt the state and many small cities that were forced to bear unrealistic costs," Pell added.
...
"The only entities that are able to offer benefits on the level we are now seeing in Grants Pass are those that have the ability to raise fees, taxes and levies," he said. "The only other way it is done, like our federal government now does, is borrow the money and let our grandkids worry about how to pay it back. In my book, either way is unsustainable. Realistic spending is the answer."
The answer most government employees and their unions are looking for is more revenue, because compensation must rise. If more revenue isn't available, it may be necessary to cut services and even a few junior employees to pay for the increased compensation. If the public wants those services back, the class sizes to shrink, etc., it needs to fork up some more money. That's the realistic spending they're looking for.
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