CLT
UPDATE
Saturday, May 8, 2004
Tax-and-Spend Caucus in overdrive
Responding to Gov. Mitt Romney's sudden call on Monday to lower the income tax rate from 5.3 percent to 5 percent, Sen. Therese Murray told the News Service that if tax revenue collections continue to rise at a rate similar to recent months, the personal exemption amounts for individuals and married couples will automatically rise in accordance with language in a 2002 tax increase law....
Health advocates and Democratic lawmakers also delivered a letter to Romney on Tuesday, calling on the governor to restore health insurance to legal immigrants and expand health coverage to 13,000 children waiting to enroll in Medicaid....
Meanwhile, Executive Director of Citizens for Limited Taxation Barbara Anderson praised Romney for upholding the will of the voters in 2000 and calling for a tax rollback.
"Governor Romney pledged that he would continue the people's rollback as soon as we emerged from the economic cycle downturn," Anderson said in a press release. "We applaud his proposal to keep the promise and immediately restore the income tax rate to 5 percent."
State House News Service
Tuesday, May 4, 2004
Tax growth means automatic tax cut "most likely,"
senate chief says
"If April revenues continue ... it would trigger a tax break," said Michael J.
Widmer, president of the Massachusetts Taxpayers Foundation, a business-funded nonprofit that monitors taxes and government spending.
But he cautioned the projections are based on recent revenues.
"A tax cut depends on what happens over the next eight months," he said. "We haven't even started the new fiscal year."
The Boston Globe
Wednesday, May 5, 2004
Rising revenues could trigger automatic tax cut
Pass the paper bag. We could hear the hyperventilating from Globe offices on Morrissey Boulevard all the way over here at One Herald Square as Gov. Mitt Romney proposed cutting the state income tax by a piddling $225 million Monday.
The very idea of giving taxpayers back some of the $500 million in higher than expected revenue collected by the state so far this fiscal year is really an outrage, isn't it?
It is, we suppose, to those for whom the interest of taxpayers, the will of the voters and the health of the economy are at the bottom of the priority list....
In 2000, voters dismissed a multimillion dollar scare campaign by special interests to stop the income tax rollback. And when they were ignored, voters nearly eliminated the tax altogether in 2002.
Those still selling that taxes are "out of line with the essential responsibilities of state government" - as our Globe compatriots do repeatedly - won't ever give up. Romney can't either.
A Boston Herald editorial
Wednesday, May 5, 2004
Tax cuts crucial to state's future
A troika of the state's most powerful business groups -- the Massachusetts Taxpayers Foundation, the Artery Business Committee, and the Massachusetts Business Roundtable -- have collaborated on a report due out this week that will slam Governor Mitt Romney's most ambitious reform initiative: merging the Turnpike Authority with the state Highway Department....
Michael J. Widmer -- president of the Taxpayers Foundation, a nonpartisan, business-backed public policy group -- said he was disappointed that the roundtable decided not to sign on to the report....
Although Widmer's organization has several board members with close ties to Romney and the Republican establishment, Widmer himself has been something of a persona non grata in the administration since he questioned projected cost savings under some of Romney's earlier government restructuring plans.
The Boston Globe
Friday, May 7, 2004
Business groups rip Romney's Pike plan
It's Mitt's not-so-secret mission: Get the mayors to toe a tighter bottom line.
To that end, Romney and Eric Kriss, his secretary of administration and finance, have been taking a polite but pointed message out to cities and towns.
To wit: You've got to keep your costs under control, and that means resisting the pressure of public employee unions for unsustainable raises.
As Kriss sees it, there's a dysfunctional political ecology driving those costs. The public employee unions help elect candidates to municipal office and the Legislature. Those candidates then pass measures favorable to -- or defeat reforms opposed by -- the unions that gave them electoral aid.
One result is that costs in the public sector are often considerably higher than those in the private sector. Kriss cites federal Bureau of Labor Statistics data showing that in Eastern Massachusetts, public employees make about 12 percent more than private sector employees doing comparable work....
At the local level, Kriss sees steady pressure for wage packages that are often considerably higher than those granted in the private sector. Because wages and benefits for municipal employees make up fully 76 percent of the average municipal budget -- and because fixed costs are another 20 percent -- that can quickly become a problem....
"In the long run, we live on our economy," says Kriss. "If the economy is growing 3 to 4 percent a year, how can you have a government grow faster?"
How often does that happen? "All the time," Kriss contends....
In cases like those, private sector workers are, as taxpayers, being asked to help fund yearly raises in excess of what they themselves are getting....
Finally, there should be more truth in advertising when it comes to public contracts, says the secretary. For example, though it has been described as raising pedagogical pay by 9 percent over three years, the new contract with the Boston Teachers Union, with its "steps" and other provisions, will actually mean a 30 percent increase over that period for some teachers.
The Boston Globe
Friday, May 7, 2004
Romney's frugality pitch
By Scot Lehigh
The practice of sick time buybacks -- whereby municipal and state workers can cash in unused sick days accumulated over years -- suggests that managers in the public sector lack clout. With limited ability to discipline employees for workplace infractions such as abuse of sick leave, managers
apparently resort to carrots instead.
According to a recent analysis by Globe reporter Ric Kahn, 159 cities and towns paid out at least $29 million for unused sick days last year. While communities struggled to maintain basic services in a period marked by cuts in local aid, some retirees walked away with windfalls for adhering to the most basic of honest workplace practices: using sick days only for legitimate illnesses....
In tough bargaining sessions, municipal leaders like to say that they won't knuckle under to unions and mortgage the futures of their cities and towns. But sick time buybacks do just that, and in nontransparent ways.
A Boston Globe editorial
Saturday, May 8, 2004
A sick system
Chip Ford's CLT
Commentary
It's been an active news week on Bacon Hill, so
let's catch up.
The Tax-and-Spend Caucus is in overdrive since Gov.
Romney announced that revenue has begun to pour in once again and it's
time to consummate our tax rollback
mandate. Now they want to allow the personal exemption to increase,
instead of implementing the taxpayers' rollback mandate.
The Legislature doubled the personal exemption in
1998 as its preferred tax cut to hopefully fend off our rollback. But it
reduced it in 2002 at the same time it "froze" our rollback
and the charitable donations deduction also approved by the voters in
2000. (See: "Study ranks state third in tax hikes
- Revenues expected to rise 5.6 percent," Boston Globe, Jul. 25, 2002.)
According to a recent analysis by the Romney
administration, our tax rollback
won't be fully accomplished (back down to 5 percent) , under the
Legislature's plan, until 2014. And this only happens under a perfect
revenue scenario.
The personal exemption should have been indexed for
inflation long ago anyway, as it has been with federal taxes since the
Reagan administration. Now the Tax-and-Spend Caucus is touting its
"trigger provision" -- automatic incremental increases in the
exemption based on revenue growth -- built in when they slashed it. So
are asserting that we don't need another tax cut.
Under the Legislature's 2002 tax hike scheme, our tax
rollback doesn't kick back in until their personal exemption has
been fully restored. If it's only "most likely" that the
increase in the personal exemption is going to happen, when do you
suppose we'll ever see the income tax rate rolled all the way back to
its historic 5 percent. We're glad the governor has started our rollback
rolling again.
*
*
*
You've got to admire Romney administration Secretary
of Administration and Finance Eric Kriss for bearing down on all the
political sacred cows. First he targeted the "net givers and
takers" to howls of outrage (See: CLT
News Release, Oct. 22, 2003, "CLT awards 'Tell the truth and shame the
devil' award to Eric Kriss"), then he went after the labor
unions, calling their influence "a hidden tax." (See: CLT Update,
"Kriss hammered again for daring to speak the obvious," Dec. 17, 2003.)
Now, he's taking on the public sector unions for driving up the cost of
state and municipal government.
As Boston Globe columnist Scot Lehigh pointed out in
his column about Kriss, the results are that "costs in the public sector are often considerably higher than those in the private
sector," and in municipal government "wage packages that are often considerably higher than those granted in the private
sector." All we've ever heard, before Eric Kriss came along, was
how much those poor city and town workers sacrifice for the public good.
Let's hope he keeps his knife sharp. Eric Kriss is
saying what we've all known all along, but few if any in government
would ever dare admit.
*
*
*
Along that line, credit is also due to the Boston
Globe for its extensive exposé of outrageous sick-time buy backs for
those same overpaid public employees, the too-long hidden real
cost to taxpayers for their employment. How can one newspaper be so
radically schizophrenic between its editorial side and its news
reporting? The news side exposes massive taxpayer-funded boondoggles,
while its editorial side ceaselessly clamors for higher and higher taxes
to fund those very same boondoggles.
To read this extensive investigative project in full,
see "Budgets sag under sick-time buybacks."
*
*
*
There goes Michael Widmer and his so-called
Massachusetts Taxpayers Foundation, again trying to undermine the Romney
administration's efforts at reforming state government. How can Mickey
and the MTF still cling to any credibility, be taken seriously by
anyone?
It is gratifying to read that "Widmer himself has been something of a persona non grata in the administration since he questioned projected cost savings under some of Romney's earlier government restructuring
plans." It's about time someone besides us sees through him and MTF.
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Chip
Ford |
State House News Service
Tuesday, May 4, 2004
Tax growth means automatic tax cut "most likely,"
senate chief says
By Amy Lambiaso
State tax collections are "most likely" on track to trigger an automatic tax cut next year, the Senate's top budget writer said Tuesday.
Responding to Gov. Mitt Romney's sudden call on Monday to lower the income tax rate from 5.3 percent to 5 percent, Sen. Therese Murray told the News Service that if tax revenue collections continue to rise at a rate similar to recent months, the personal exemption amounts for individuals and married couples will automatically rise in accordance with language in a 2002 tax increase law.
"If this economy is continuing, then by January that will trigger a tax break," said Murray, a Plymouth Democrat and chairwoman of the Senate Ways and Means Committee. "The governor doesn't even have to do it - it's going to happen."
The trigger provision was included within a $1.2 billion tax package passed in 2002 and intended to provide relief to taxpayers once state collections improved. The state Department of Revenue reported on Monday that tax collections are currently running $517 million above benchmark estimates used to build next year's budget, due in part to a 29 percent increase - or $410 million - in revenues over April 2003.
According to state law, if inflation-adjusted tax collections grow by more than 2.5 percent in one year, the individual personal exemption will rise by $275, and by $550 for married couples. That amount, representing income not subject to taxation, will continue to rise each year that tax collections grow 2.5 percent until exemptions reach the 2001 levels of $4,400 for individuals or $8,800 for married couples.
Currently, the personal exemption for individuals is $3,300 and $6,600 for couples.
Once the personal exemptions are restored to 2001 levels, the income tax rate would drop by .5 percent each year that tax collections grow by 2.5 percent, until the tax rate hits 5 percent. That could be several years off, compared to Romney's plan to lower the income tax rate to 5 percent, effective Jan. 1, 2005.
Murray predicted that raising the personal exemption next year would take $60 million from the state's coffers and deliver it to taxpayers.
"This is a pretty good amount of money for a single filer and couple - it's significant," Murray said.
Murray also joined other top Democrats in rejecting Romney's tax cut idea, saying the state should focus instead on restoring funds to health and human service programs hit by budget cuts, local aid and education, and rebuilding the stabilization fund.
"We have to put money back in the reserves because there will be another downturn," Murray said. "We're just tweaking right now, just coming around the corner on this. It makes absolutely no sense to me why we would jump out front and say - oh, look at all this money. It isn't a lot of money. We're still in deficit even with that money."
The House relied on $673 million of one-time revenues from the rainy day fund in its $23 billion budget proposal for next year. Senate leaders are crafting their own budget to be released next week. Murray said the state is also required to deposit $74 million into the rainy day fund by statute each year.
"We need to look to put into stabilization and/or if there's programs that absolutely have been cut to the bone, we need to look at those programs," she said. "And cities and towns are going to want us to look at them."
Murray added that the state should "hold off" on spending the expected fiscal 2004 surplus until the Supreme Judicial Court has ruled on a Superior Court judge's order for the state to spend more money on local Chapter 70 education aid to fund mandates of the 1993 Education Reform Act. That case, Hancock vs. Driscoll, could end up costing the state between $1.5 and $3 billion, Murray said.
Health advocates and Democratic lawmakers also delivered a letter to Romney on Tuesday, calling on the governor to restore health insurance to legal immigrants and expand health coverage to 13,000 children waiting to enroll in Medicaid. Advocates say state law requires the use of any Medicaid surplus to provide coverage to 10,000 immigrants who were eliminated from coverage last August. Romney said yesterday that the state is currently projecting a $250 million surplus in its Medicaid account.
"We're calling on this governor, who doesn't choose which laws to follow, to follow the law in this case," John McDonough, executive director of Health Care For All, said outside the governor's third floor State House office. McDonough was joined by Reps. Antonio Cabral (D-New Bedford), Kathleen Teahan (D-Whitman) Peter Koutoujian (D-Waltham), and Sen. Mark Montigny (D-New Bedford).
"These low-income legal immigrants have been left with no source of basic health care," the letter reads.
Meanwhile, Executive Director of Citizens for Limited Taxation Barbara Anderson praised Romney for upholding the will of the voters in 2000 and calling for a tax rollback.
"Governor Romney pledged that he would continue the people's rollback as soon as we emerged from the economic cycle downturn," Anderson said in a press release. "We applaud his proposal to keep the promise and immediately restore the income tax rate to 5 percent."
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The Boston Globe
Wednesday, May 5, 2004
Rising revenues could trigger automatic tax cut
By David Abel, Globe Staff
State residents may see an automatic tax cut if revenues continue to pour swiftly into state budget coffers, rendering the governor's proposed tax cut unnecessary, a tax specialist and a key lawmaker said.
A 2002 state law allows for automatic tax cuts as inflation-adjusted tax collections grow. If revenues rise by more than 2.5 percent in one year, the individual personal exemption will rise by $275, and by $550 for married couples, according to the State House News Service.
The amount rises each year that tax collections grow 2.5 percent, until exemptions reach the 2001 levels of $4,400 for individuals or $8,800 for married couples, the News Service said.
"If April revenues continue ... it would trigger a tax break," said Michael J.
Widmer, president of the Massachusetts Taxpayers Foundation, a business-funded nonprofit that monitors taxes and government spending.
But he cautioned the projections are based on recent revenues.
"A tax cut depends on what happens over the next eight months," he said. "We haven't even started the new fiscal year."
In response to Governor Mitt Romney's call this week to lower the income tax rate, from 5.3 percent to 5 percent, Senator Therese Murray told the News Service that if revenue collections rise at a rate similar to recent months, the personal exemption amounts for individuals and married couples will automatically rise.
"If this economy is continuing, then by January that will trigger a tax break," Murray, a Plymouth Democrat and chairwoman of the Senate Ways and Means Committee, told the News Service. "The governor doesn't even have to do it. It's going to happen."
The automatic tax cut in the $1.2 billion tax package passed in 2002 was intended to provide relief to taxpayers as state revenues increase. On Monday, the state Department of Revenue reported tax collections are now $517 million above the estimates used to shape next year's budget, according to the News Service. Last month, tax revenues rose 29 percent, or $410 million, over April 2003.
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The Boston Herald
Wednesday, May 5, 2004
A Boston Globe editorial
Tax cuts crucial to state's future
Pass the paper bag. We could hear the hyperventilating from Globe offices on Morrissey Boulevard all the way over here at One Herald Square as Gov. Mitt Romney proposed cutting the state income tax by a piddling $225 million Monday.
The very idea of giving taxpayers back some of the $500 million in higher than expected revenue collected by the state so far this fiscal year is really an outrage, isn't it?
It is, we suppose, to those for whom the interest of taxpayers, the will of the voters and the health of the economy are at the bottom of the priority list.
Thank goodness Romney isn't among that crowd. It has fallen to the occupant of the Corner Office for the past dozen years to force the subject of tax cuts into the public debate over state spending.
Just last week the House made clear that the governor's proposed $275 million capital gains tax rebate, submitted as part of the fiscal 2005 budget (and in keeping with a recent Supreme Judicial Court decision on the timing of the imposition of the tax), was off the table.
This more broadly based one cannot be so easily dismissed.
"The recovery is under way, but it's no time to change our policies of restraint and reform and limited taxation - those policies that helped get us to recovery," Romney said, as he proposed reducing the income tax from 5.3 percent to 5 percent - where voters clearly wanted it to go.
There will always be those who hold the contradictory view that nothing state government does can affect economic growth but somehow the world will come to an end if government restrains spending. Go figure.
The voters know differently. In 1993, they heard the argument that education reform couldn't be funded without a tax increase, and then saw billions poured into public schools without one. They heard the Chicken Little protestations every time a tax-cut proposal was put on the table, yet somehow the sky didn't fall.
In 2000, voters dismissed a multimillion dollar scare campaign by special interests to stop the income tax rollback. And when they were ignored, voters nearly eliminated the tax altogether in 2002.
Those still selling that taxes are "out of line with the essential responsibilities of state government" - as our Globe compatriots do repeatedly - won't ever give up. Romney can't either.
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The Boston Globe
Friday, May 7, 2004
Business groups rip Romney's Pike plan
By Raphael Lewis, Globe Staff
A troika of the state's most powerful business groups -- the Massachusetts Taxpayers Foundation, the Artery Business Committee, and the Massachusetts Business Roundtable -- have collaborated on a report due out this week that will slam Governor Mitt Romney's most ambitious reform initiative: merging the Turnpike Authority with the state Highway Department.
But the name of the roundtable, made up of 75 firms that employ roughly 10 percent of the Bay State's workers, will not appear on the white paper, after Romney's top aides placed calls to roughly a half-dozen key board members to express displeasure about the report's conclusions.
Eric Fehrnstrom, Romney's communications director, acknowledged yesterday that the aides, including chief of staff Beth Myers, called influential members of the three groups involved.
The aides were merely pressing to present their argument for the merger, Fehrnstrom insisted. "We knew there was a report coming out on the Turnpike merger, and we reached out to members on the boards of the organizations that were sponsoring the report to ask if we could provide input and present our case."
For almost two years, Romney has crisscrossed the state to sell his merger plan to voters, businesses, and various interest groups, but the Legislature has dismissed the proposal as a power grab. Romney argues that under his proposal the state could glean $190 million in a one-time cash infusion from the deal, while achieving another $20 million in annual savings.
The report, in the works for at least three months, will call into doubt the $20 million savings, the ability of the state Highway Department to manage and maintain the complex new series of tunnels and bridges built by the Central Artery/Tunnel project, and the direction and cohesiveness of overall transportation planning, according to business, transportation, and state officials who have seen the report.
When word of the report's findings circulated over the last several days, Romney's aides began making calls to the board members who oversee the organizations involved. Alan Macdonald, the roundtable executive director, insisted yesterday that the calls "were not heavy-handed, but more casual."
"The only calls were inquiries as to whether or not the paper was being done and whether there was an opportunity for further discussion once it was done," Macdonald said. "No member [of the roundtable] called me and said, `Alan, we've got to be off this paper because the administration called.' "
Macdonald said his organization still stands behind the report's general conclusions, even if the Roundtable, which has helped out with the report's findings and wording from the outset, no longer intends to put its name on the front page as a collaborator.
He said one reason the roundtable dropped its name from the paper is that a member of the group is part of a legislative task force examining transportation issues, including the merger, and the roundtable wants to wait for that report to come out.
"In terms of the value of the [Turnpike] Authority as to what it's doing now and the difficulty of unforeseen circumstances of such a merger at this time, we agree with the comments that are in there that you don't want to move ahead if you're going to give up more than you're going to get," Macdonald said. "So for that reason, we would not be in favor of the merger as it has been proposed, but we do want more centralization of transportation policies in this state."
He said that things might be different "if we knew what the merger would mean in the near term in terms of the Central Artery project."
"But there's more work to do, so from the point of view of the roundtable, you would want far more details in advance instead of as you go," Macdonald said."It brought up a lot of questions that we could not answer."
Michael J. Widmer -- president of the Taxpayers Foundation, a nonpartisan, business-backed public policy group -- said he was disappointed that the roundtable decided not to sign on to the report.
But Widmer said he was buoyed by the knowledge that the group had contributed "invaluable insights" to the final product.
"I respect their decision; they were enormously helpful throughout the process," Widmer said. "Each organization has its own internal processes for reviewing materials and getting the membership's input. We tend to have more autonomy at the foundation. They're a very credible organization, but I don't think it minimizes the impact" of the report now that the roundtable has walked away.
Although Widmer's organization has several board members with close ties to Romney and the Republican establishment, Widmer himself has been something of a persona non grata in the administration since he questioned projected cost savings under some of Romney's earlier government restructuring plans. Yesterday Widmer said it was important to point out that Romney deserves credit "for pushing transportation planning to the forefront."
Richard Dimino -- who heads the Artery Business Committee, a group of 80 downtown Boston firms that employ roughly 100,000 local workers -- said his organization never wavered in its commitment to signing on to the report, even after Widmer offered him the chance to back away after the roundtable did so. Without the roundtable, the report will still be strong, Dimino said, in part because the group added so much to the research and editing process.
The roundtable "has been incredibly helpful resource in preparing this paper," he said. "They did some wonderful work to look at the larger transportation issues in the Commonwealth some time ago, and that paper has served as a guide to everyone who cares about the issue."
"We always knew that in the end, as we prepared to publish, it would be subject to internal review and approval," he said.
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The Boston Globe
Friday, May 7, 2004
Romney's frugality pitch
By Scot Lehigh
It's Mitt's not-so-secret mission: Get the mayors to toe a tighter bottom line.
To that end, Romney and Eric Kriss, his secretary of administration and finance, have been taking a polite but pointed message out to cities and towns.
To wit: You've got to keep your costs under control, and that means resisting the pressure of public employee unions for unsustainable raises.
As Kriss sees it, there's a dysfunctional political ecology driving those costs. The public employee unions help elect candidates to municipal office and the Legislature. Those candidates then pass measures favorable to -- or defeat reforms opposed by -- the unions that gave them electoral aid.
One result is that costs in the public sector are often considerably higher than those in the private sector. Kriss cites federal Bureau of Labor Statistics data showing that in Eastern Massachusetts, public employees make about 12 percent more than private sector employees doing comparable work. (Yet when the Weld administration tried to take advantage of lower private sector costs by privatizing some state services, the Legislature passed the so-called Pacheco Bill, slamming the door on that experiment in cost-efficient government.)
At the local level, Kriss sees steady pressure for wage packages that are often considerably higher than those granted in the private sector. Because wages and benefits for municipal employees make up fully 76 percent of the average municipal budget -- and because fixed costs are another 20 percent -- that can quickly become a problem.
The total yearly increase in revenues for localities is 3.5 to 4.3 percent. So if local governments grant raises that outstrip that rate, labor costs will come to consume larger and larger shares of local budgets and in time make those budgets unsustainable.
"In the long run, we live on our economy," says Kriss. "If the economy is growing 3 to 4 percent a year, how can you have a government grow faster?"
How often does that happen? "All the time," Kriss contends.
Certainly examples of bountiful contracts aren't hard to find. The last Boston firefighters pact gave an average raise of 21.5 percent over four years plus a generous bank of sick days, a hefty portion of which can be redeemed upon retirement. Meanwhile, in an eyebrow-raising deal because of belt-tightening times, teachers in cash-strapped Haverhill got 6 percent raises in fiscal years 2003 and 2004, according to Kriss's office; because they had taken a zero in 2002, the pact amounted to 12 percent over three years. In cases like those, private sector workers are, as taxpayers, being asked to help fund yearly raises in excess of what they themselves are getting.
So what's to be done? The administration is working on plans to promote more stability and transparency in local finance. Although the policy isn't fully formed, the notion is to have the state's Division of Local Services, which currently reviews municipal budgets for a balanced bottom line, provide some guidelines about what is sustainable over the long term. Another notion is to require an impact statement detailing how any contracts deemed to exceed the sustainable growth rate will be paid for.
"All we are saying is that if you sign a contract that does not match up with your sustainable growth, tell us what your plan is," Kriss says. "Is there going to be a layoff? A tax increase? A Proposition 2½ override?"
Finally, there should be more truth in advertising when it comes to public contracts, says the secretary. For example, though it has been described as raising pedagogical pay by 9 percent over three years, the new contract with the Boston Teachers Union, with its "steps" and other provisions, will actually mean a 30 percent increase over that period for some teachers.
In some quarters, the initial reception to the administration's initiative has been essentially this: Keep your nose out of City Hall.
But actually, the administration is right to focus on the issue of affordability.
"We are trying to raise the level of conversation so that regular citizens can understand what is happening to their own government," Kriss says. "If anybody believes we have solved the problems in state and, particularly, municipal government, it is just not true. We continue to be at the edge of a cliff."
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The Boston Globe
Saturday, May 8, 2004
A Boston Globe editorial
A sick system
The practice of sick time buybacks -- whereby municipal and state workers can cash in unused sick days accumulated over years -- suggests that managers in the public sector lack clout. With limited ability to discipline employees for workplace infractions such as abuse of sick leave, managers apparently resort to carrots instead.
According to a recent analysis by Globe reporter Ric Kahn, 159 cities and towns paid out at least $29 million for unused sick days last year. While communities struggled to maintain basic services in a period marked by cuts in local aid, some retirees walked away with windfalls for adhering to the most basic of honest workplace practices: using sick days only for legitimate illnesses.
Mayor Menino not only perpetuates the practice; he exacerbates it. Boston taxpayers paid $12 million to retirees who cashed out their sick days last year. One educator walked away with $110,000. Yet the mayor has dangled even more generous sick time buybacks in recent contract negotiations.
Some municipal managers believe that it is more economical to barter sick days for cash than to add to the base of the city budget through hefty raises. Teachers and firefighters argue that the incentive saves the cost of substitutes and replacements. But if healthy employees actually showed up for work rather than malingering at home, replacements would not be necessary. Far better to negotiate contracts that improve the salaries of all workers and allow for disciplining those who fake illnesses than to promote dishonest shell games with sick leave. The cost-benefit analysis is a mystery. And it is likely to remain so at City Hall because no one is calculating the costs. Even when the numbers work, sick time buybacks are ethically flawed. Employees are rewarded for not cheating, a sad commentary on the municipal workplace. And the fact that municipal managers often benefit from the same buyback scheme only compounds the error.
Boston and other communities with large payouts need to collect careful data on the buybacks and ensure that the practice is reflected on the books like any other transaction that affects future costs.
In some areas the program already looks like an outright boondoggle. In Boston, for instance, employees at their highest earning levels are allowed to cash in sick days accumulated years, even decades, earlier, when the days were "worth" less money. At a minimum, municipal managers should bargain contracts that require employees to cash in unused sick days at the end of each fiscal year.
In tough bargaining sessions, municipal leaders like to say that they won't knuckle under to unions and mortgage the futures of their cities and towns. But sick time buybacks do just that, and in nontransparent ways.
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