The Boston Globe
Friday, April 23, 2004
Budgets sag under sick-time buybacks
Boston payouts most in the state
By Ric Kahn, Globe Staff
Forget the ceremonial rubber chicken dinners and silver-plated Paul Revere bowls. For more than 800 public employees retiring in Boston, the city gave a going-away gift that made them feel like a million dollars. Actually, it was $12.6 million.
The farewell present over the last fiscal year was not for sensational teaching or spectacular firefighting. It was for achievements more banal: their ability to rarely call in sick. Under long-held contract provisions with cities and towns across the state, municipal employees can cash in unused sick days when they retire.
As a result, buying back sick time can be a huge and little noticed burden on municipal budgets and taxpayers, in Boston and beyond. Some state employees enjoy similar benefits.
A Globe analysis found that from July 2002 through June 2003, the last fiscal year, 159 cities and towns in Greater Boston paid out at least $29.4 million in sick-time buybacks. In Cambridge, it was $1.1 million; in Waltham, $415,260. Brockton schools alone paid $895,552; in Lowell, schools paid $825,931.
But number one by far was Boston. Sick-time payouts were solidified earlier this month, when two unions ratified contracts that perpetuate the provision.
Even as the city has sought new revenues in fees and commercial property taxes, it has had to shell out $50,000 or more in sick-time buybacks on top of regular pensions to 59 of those retiring employees, including two six-figure recipients. Of 904 Boston retirees, only 69 did not get sick-time buybacks.
To supporters, the buyback is a negotiated benefit that improves productivity by keeping workers on the job. For critics, it's a high-priced handout.
"This is killing me: $12 million?" said Claudia Owumi, 57, a community activist from Dorchester. She reeled off several alternatives she would rather see the city spend money on: more youth centers, summer jobs, patrol officers, and teachers. Indeed, the $12.6 million could pay the average salaries of 196 more teachers or the average earnings of 154 more patrol officers.
Last fiscal year, city officials handed out an average of $19,279.10 to 457 retired school employees for unused sick time. During that period, parents at Boston Latin School paid at least $4,000 from their own pockets to buy paper and other supplies, according to a mother there who kept the numbers.
Mayor Thomas M. Menino, who has approved contracts that continue the tradition of allowing public employees to swap unused sick days for dollars, would not comment for this report. His press office referred questions to other city officials, including Richard Driscoll, Boston's deputy director of human resources. Driscoll's explanation of the buyback: "It's an incentive not to use your sick leave."
Backers of the provision say it reduces absenteeism and saves on replacement costs. Veteran teacher and assistant headmaster Walter Wood, 58, said he hardly called in sick during his 35 years in the Boston Public Schools. So when he retired last year, he said, he felt no guilt about claiming the unused portion of the 15 sick days he was allotted for each year. His payout: $79,376.86.
"You try to go to work every day and be responsible.... You save the system money," said Wood, of Hyde Park, referring to dollars the city would have had to pay him, as well as a substitute, for every sick day taken.
City officials said the buyback figure spiked in fiscal 2003. They say that retirements surged because of inducements added to avoid drastic layoffs and alter the balance of the workforce toward younger workers with lower salaries.
Opponents say the big payoffs highlight what they consider the flimsy foundation of the whole concept. To them, sick time is a contingency for illness, not something to be carried over and converted into cash decades later.
Taxpayer groups say that workers who call in sick when they are not, to get the days off are taking advantage of the system.
"It's absurd," said Barbara Anderson, executive director of Citizens for Limited
Taxation. "You should be punished for cheating, not given an incentive not to cheat."
Of the Boston school retirees who received $8.8 million in fiscal 2003, John Halloran stood at the head of the class. Halloran traded in 40 percent of about 500 unused sick days for $110,659.14. During a career of more than 40 years that included periods as teacher, principal, and school-assignment official, Halloran said, he avoided sick days for the children, not the extra cash.
"A lot of times you go into work when you're not well.... There is a dedication you feel," said Halloran, 65, who earmarked the buyback dollars, which he figured at $70,000 after taxes, to help build an addition on his Plymouth home. He called the money "a perk of working in the public sector."
In the private sector, the basic rule of sick time is "use it or lose it."
Still, even some critics acknowledge that sick-time buybacks have been part of public employee pay plans for so many decades that they will not easily be removed.
In lean fiscal times, though, some say that's the direction municipalities should go.
"It's not a career entitlement," said Michael Widmer, president of the Massachusetts Taxpayers Foundation. "It's worth negotiating out."
That's what other cities and towns outside Boston are doing. In Saugus, officials put the brakes on sick-time buybacks in 1999, declaring that school employees hired thereafter could not redeem their days.
While some are pulling back, Boston is cementing sick-time buyback language into its contracts. In some cases, it is even improving the terms for those eligible to cash out. Within the past two weeks, the Salaried Employees of North America Local 9158 ratified a contract for 700 middle managers that bumps the percentage of unused sick days that retirees can barter for cash, to 37 percent from 32. Two days later, the Boston Teachers Union approved a contract for its 7,000 members that kept the sick-time buyback exchange rate at 40 percent.
Meanwhile, the International Association of Firefighters won a sick-time buyback clause in its 2000-2003 contract after Local 718 argued that it was the last union in the city without one. The contract also granted veteran firefighters a starting sum of sick days to add to. That was the "surprise sweetener of this contract," the Boston Municipal Research Bureau said in 2001. Nick DiMarino, president of Boston Firefighters Local 718 said, "This is, more or less, our golden parachute." By loading the back end of contracts with buyouts, critics said a mayor can achieve labor peace without appearing to betray taxpayers. "It is a way to increase compensation without it looking like there's a big salary increase," said Sam Tyler, Municipal Research Bureau president.
That was how the concept of sick-time buybacks got entrenched in the first place, according to Lee Craig, an economics professor at North Carolina State University. Finding raises hard to come by during World War II, private-sector unions won fringe benefits instead, Craig said. As public-sector unionization expanded, so did benefit packages.
By the 1970s and '80s, the concept of sick-time buyback sported a political sheen: During tight times, it offered unions alternative compensation while letting government officials sidestep testy taxpayers, at least for a while.
To a politician, said Craig, it's a great deal. "I'm getting work today," Craig said, "and the bill won't come due on their watch."
Matt Carroll, Meredith Goldstein, Douglas Belkin, and Emily Shartin of the Globe staff contributed to this report. A complete list of Greater Boston payouts, by community, will be in Sunday's regional editions.
The Boston Globe
City Edition
Sunday, April 25, 2004
Municipal retirees cashing in
Unused sick time a healthy windfall
By Ric Kahn, Globe Staff
Boston may be the high roller. But Cambridge is no penny-pincher, either. And by comparison, Somerville and Brookline look like utter tightwads with taxpayers' money.
The issue is sick-time buybacks for public employees: the small-print provision that lets them cash out when they retire, exchanging part of their unused sick days for municipal money above and beyond their pensions. The buybacks are extremely rare in the private sector -- which generally has a "use-it-or-lose-it" policy each year, but the payouts have been a part of public contracts for decades.
Critics say it's an ill-given benefit bartered in back rooms -- away from taxpayers' eyes. If you're sick, they say, stay home. If you're not, they say, you shouldn't get paid for not faking it.
"It's called sick leave for a reason -- it's available to you if you're sick," said Barbara Anderson, executive director of Citizens for Limited Taxation. "To reward people for not suffering through illness is absurd."
Supporters in government and labor say it cuts down on low attendance and high replacement costs by enticing people not to use their quota of sick days.
Last fiscal year, Cambridge bought out $1.1 million worth of unused sick days, second in the area only to Boston, which paid out a startling $12.6 million, or an average of $13,957.57 for every retiree.
Michael Gardner, Cambridge's personnel director, said the city gets a bang for its buck -- an average payout of $13,317.13 -- in continuity of services. "We have benefited in their nonuse of sick leave," he said. "A sick call can be quite disruptive to departmental operations."
In Brookline, the town bought back $142,874 of sick time last fiscal year, an average return of $2,695.73 to retirees. Town Administrator Richard Kelliher said ceilings ranging from $3,300 to $5,000 on most of the payouts helped keep the dollars in check. Kelliher takes a pragmatic view: To end sick time buybacks, the town might have to give the unions something even more costly. So he lives with it.
"I just think it's a fact of life in the public human resource business," he said. "It's part of a total compensation package."
Somerville's price tag for sicktime buybacks last fiscal year was a measly $97,800 -- or $2,328.57 to every departing employee. All but one worked in the School Department. City officials said a $3,000 cap on teacher trade-ins was key to keeping costs down.
"If management uses it as a tool to discourage absenteeism," said Joseph Tringale, assistant comptroller for the Somerville School Department, "then we would say it's working."
In Boston, Albert Bowers Jr. said that during his 34 years as a Boston Fire Department dispatcher he didn't need the financial promise of a sick-time buyback not to call in sick. A good thing, since it didn't exist for most of his tour anyway, appearing for the first time in the 2000-'03 contract.
"I loved my job," said Bowers, 61, of Needham.
Yet there it was, anyway, when he retired last fiscal year: $33,299.18.
"I don't even know how it works," he said. "They told me X number of dollars. I said, 'Gee, that's nice. I'll take it.' "
Bowers said he deserves every penny: "I did my job and made sure the city was safe to the best of [my] ability."
The Boston Globe
North Edition
Sunday, April 25, 2004
Some seeking a cure for sick leave buybacks
Practice taking millions annually from cities, towns
By Meredith Goldstein and Jenny Amaral
Globe Staff and Globe Correspondent
For years, officials in Haverhill have scrambled to close a multimillion dollar budget gap that annually strains city services.
There are threats once again of massive cuts. Already about 80 jobs have been eliminated during the past two fiscal years.
Meanwhile, in those two years, Haverhill has paid an additional $400,000 to retiring employees.
Why?
Because for decades, city employees have been able to hold onto their unused sick days, and at the end of their tenure with the city, they have been financially reimbursed for the days they didn't use.
The practice is called "sick leave buybacks," an incentive rarely used in the private sector and one that isn't voted on by taxpayers who foot the bill each year. The payout for unused sick time cost Greater Boston taxpayers almost $30 million in 2003. The buybacks have been negotiated in the fine print of many public sector jobs, although some communities have sought to halt them.
"I think it's outrageous," said Haverhill Mayor James J. Fiorentini of the amount his city spends on sick time. Fiorentini said he thinks sick time is for the sick and that employees should not be compensated for not calling in ill as often as possible. "My position is that sick time is not an entitlement, it's not a right."
In Lynn, a cash-strapped city with minimal reserves, taxpayers spent more than $1 million on unused sick days during 2003. Because of the closing of two municipally owned nursing homes, layoffs, and employees who took advantage of the state's early retirement program, the city had to come up with an unexpected payout, the highest in the region.
"This is a situation that was allowed to exist for years and we had to honor the obligation because of past practice," said Richard J. Fortucci, Lynn's treasurer.
Haverhill and Lynn are not alone.
The Globe surveyed 54 communities and school districts north of Boston -- from Chelsea to Salisbury -- to find out how much money is spent reimbursing employees for unused sick time. In fiscal year 2003, taxpayers in the region paid at least $4.5 million to government workers for not getting sick over the years.
"They can backdoor it," said Larry Streeter, who retired as Salisbury police chief in fiscal year 2002. Streeter took a $28,576 buyback before starting his new job in Newton, N.H.
In Salem, taxpayers spent more than $470,000 on sick time buybacks for school employees in fiscal year 2003. In Newburyport, where the city spent almost $600,000 on buybacks, one police lieutenant received almost $38,000. In Lynn, retired nursing home employee Donald Dixon received more than $73,000, the highest individual buyback in the region.
In the wake of budget cuts and decreasing state aid, many municipalities and school districts across the state are attempting to cap or eliminate sick time reimbursements.
After 1988, Lynn stopped offering sick time money to most of its municipal employees. In Saugus, where officials are working to cut $1.5 million from the fiscal year 2005 budget and have pinned their hopes on an override, School Superintendent Keith Manville said he expects to spend between $350,000 and $400,000 on sick time buybacks in the coming year.
Saugus spent $466,423 on sick time reimbursements in fiscal year 2003, with about $231,910 going to school employees.
"It's an incredible amount of money," Manville said.
In 1999, Saugus took the first step to end sick time payouts, stating in its contracts that any employee hired after that year would not be entitled to the money. It also capped the buyback rate at 2002 salaries.
Manville estimated that it will take 20 years for all of the employees hired before 1999 to filter out of the school system. Until then, Saugus will most likely spend up to several hundred thousand each year for the unused sick time, he said.
In the Newburyport school system, which paid almost $400,000, new hires are also no longer entitled to the sick time money. Mayor and School Committee chairwoman Mary Anne Clancy said the sick time money was always considered an extra parting gift. She said Newburyport wanted to be more forthright that the money represented extra money for retirement, and replaced the sick time option with an annuity for employees, similar to a 401k plan.
"It certainly was considered a bonus for employees," she said.
Newburyport teachers agreed to drop the sick time payback partly because of the annuity benefit, she said. But in other communities, unions and employees still advocate for the benefit, and officials have difficulty negotiating the sick day money out of contracts.
"Sick time has nothing to do with retirement, but it has evolved over time as a major benefit," said Neil Harrington, Salisbury's town manager and former Salem mayor.
Some communities have managed to avoid the practice altogether.
For a small town such as West Newbury, with about 4,000 residents, finance director Tracy Blais said paying for sick time has never been an option.
"Because of the liability," she said. "You could be faced with a $30,000 buyback. If you had two or three retirements, you could have a significant impact on your budget."
Blais said that in West Newbury, employees are entitled to 10 sick days a year. If unused, the sick days go into a personal bank for each employee. Workers may accumulate up to 120 in a personal bank.
She said she has not seen town employees taking advantage of sick time because there's not a financial incentive.
"I haven't seen that," she said. "I've only been here 12 years."
For many communities, the debate continues.
Anne Wass, vice president of the Massachusetts Teachers Association, said despite the cost of sick leave buybacks, they are warranted and offer a deferred means of boosting traditionally low teacher salaries.
"I feel like certainly . . . it's justifiable," she said, adding that because school systems often replace retiring teachers with younger employees, they will still save money after the sick time payouts.
But opponents think municipal employees shouldn't be rewarded for not calling in sick.
Barbara Anderson, executive director of Citizens for Limited
Taxation, said municipal employees shouldn't be offered incentives to prevent the misuse of sick leave and called the practice deceptive.
"If people aren't sick they should consider themselves lucky," Anderson said.
The Boston Globe
Northwest Edition
Sunday, April 25, 2004
Sick-day policy called threat to fiscal health
Paying retirees for unused days seen as squandering funds
By Douglas Belkin, Globe Staff
David Moorehouse retired last year from his job as an assistant principal at Lowell High School and plans to split his time between his home in Shrewsbury and his second home in Santa Fe. It's a lifestyle that will be made all the more comfortable for the 59-year-old with the $64,518 going away present he received from the taxpayers of Lowell.
The check was cut as part of a sick-time buyback program. Though nearly unheard of in the private sector, it is typical for schoolteachers and other government employees. The program allows retiring employees to collect money for unused sick time, and in Moorehouse's case, allowed him to cash in 125 unused sick days at more than $500 per day.
"It's a reward for not taking days off and cheating the system," said Moorehouse, who used an average of just over four sick days a year over the course of his 35-year career. "I wouldn't have done that anyway, but it's still nice to be rewarded at the end with a little extra money."
Sick-time buybacks cost the City of Lowell $825,931 last year -- or the equivalent of about 20 teaching positions -- and as a wave of teachers retire over the next five years, that expense is expected to continue rising not only in Lowell, but in cities and towns across the state.
Buyback costs by district, Page 14
While teachers call it their version of a severance package, sick-time buybacks are coming under withering criticism this year by cash-strapped school district managers who complain they are vestigial giveaways that squander precious resources during tight economic times. Arlington Superintendent of Schools Kathleen Donovan called the buybacks a reward to employees for simply showing up for work when they are supposed to.
"We pay you to come to school and work, and then if you are out sick, we pay you," Donovan said. "So why should we pay you again for being well?"
A Globe survey of 32 cities and towns in the NorthWest circulation area found that 23 school districts have sick-time buyback programs. In the 2002-2003 school year, these districts paid a total of nearly $3.9 million to 445 teachers, or an average of about $8,700 apiece. Because programs vary from town to town, there were wide disparities in the amount each community paid out. In the Concord and Concord-Carlisle districts, for instance, the average buyback was nearly $30,000 for the 18 eligible teachers, while it was less than $2,000 in Wilmington. Payouts exceeded $100,000 in 10 of the communities.
Sick-time buybacks were first negotiated in the 1950s and 1960s, said Ron Seeber, a professor at the School of Industrial and Labor Relations at Cornell University. The programs came after unions won paid sick days and some employees abused them. The buybacks were instituted as an incentive to not use sick time.
The specific formulas used to determine the compensation for unused sick time vary. Formulas are subject to negotiations and frequently change, typically reducing payouts. Teachers are paid for a varying percentage of the sick days they have not used when they retire. In many communities, the amount they are paid for each day is capped.
For instance, in Lowell, where Moorehouse retired, teachers received payment for one-third of their unused sick time at their salary at the time of retirement. For Moorehouse, that means of the 375 sick days he didn't use during his 35 years at Lowell High School, he was able to cash in 125 days at $516 per day -- his salary when he retired.
Not all districts are as generous. In Arlington, teachers hired since 1997 receive $35 a day for a maximum of 150 days. Teachers hired before 1997 have no cap on the number of days. Donovan said negotiating that cap in 1997 was a priority when she took over as superintendent. But not all districts have been as successful negotiating limits.
Consider the case of the Concord and Concord-Carlisle schools. Of the 18 teachers who retired last year, 13 of them, averaging salaries of more than $80,000, received a total of $525,589 in buybacks upon retirement. The figure represents 2.5 percent of the district's entire $40 million budget.
"It takes away our flexibility to spend money the way we need to," said Betsy Bilodeau, chairwoman of the K-8 Concord School Committee and a member of the Concord-Carlisle Regional School Committee and the bargaining teams for both groups. "Originally, it was put in to try and reward good attendance . . . but you would hope there is a good work ethic and, that in a town like this that pays well, that wouldn't be an issue."
Because the teachers are bargaining for their next contract now, Bilodeau would not comment on the status of the buybacks except to say "that everything is on the table."
Barbara Anderson, executive director of Citizens for Limited Taxation and a fierce critic of government waste, said municipal employees shouldn't be offered incentives to prevent the misuse of sick leave.
"It's absurd," Anderson said. "You should be punished for cheating, not given an incentive not to cheat."
Teachers argue that the sick-time buyback programs are an investment in productivity, reducing absenteeism and saving on substitute teachers by offering financial incentives at a reduced rate.
Defenders of the programs say sick-time buybacks are the public sector's version of severance pay. While Massachusetts teachers pay into a pension system that can return as much as 80 percent of their salary, they typically do not receive severance packages. The buyback program works in lieu of that, said Robert Calabrese, superintendent of Billerica public schools.
"It's also an incentive for the teachers to come in," Calabrese said "The kids need the continuity, and it saves money on substitute teachers."
Anne Wass, vice president of the Massachusetts Teachers Association, which has 97,000 members statewide, said sick-leave buybacks offer a deferred means of boosting traditionally low teacher salaries.
"I feel like certainly . . . it's justifiable," she said. Because school systems can replace retiring teachers with younger teachers who are starting out lower on the pay scale, she said, retirements generally save schools money even with sick-time payouts.
The issue is expected to become increasingly costly for many communities because of the unusually large number of teachers expected to retire over the next few years. They are leaving not only because of their advancing years, but because of a state plan called RetirementPlus, which sweetens financial incentives to those who take early retirement in return for teachers paying more into their retirement plan.
Statewide, between 3,900 and 4,000 teachers are expected to begin collecting pensions this year, up from 1,800 in 2000, according to the Massachusetts Teachers' Retirement Board. By 2006, approximately 5,000 are expected to retire.
If communities want to cut the buyback program so they don't run into a situation like this in the future, they are going to have to "give to get," said Moorehouse.
"Speaking as a union person, I'll tell you anytime you want to take away something, you're going to have to give me something in return," Moorehouse said. "Any union person will tell you, everything is subject to negotiations. Everything."
The Boston Globe
West Edition
Sunday, April 25, 2004
Sick time buybacks: Incentive or budget buster?
As communities struggle with limited funds,
some question need for retirement payouts
By Emily Shartin, Globe Staff
During his 32 years with the Milford Police Department, Peter Veilleux said, he often went to work when he wasn't feeling well. So by the time he retired in 2002, he had amassed weeks and weeks of unused sick time.
For Veilleux, like a few hundred other municipal employees across the region who retired that year, the bank of sick days did not go to waste: He cashed it in for a one-time payout from Milford of $30,074.
The practice, called sick time buyback, is rare in the private sector, but common under many municipal and school system labor contracts. While critics call buybacks a waste of taxpayer dollars, many public officials defend them as a way to save communities money by keeping employees from taking unnecessary time off.
"It's an incentive to go to work every day," Veilleux said.
Veilleux called buybacks a "dying practice," but a survey of the 37 communities in the Globe West circulation area and their correlating school systems shows that the benefit is alive and well here: Despite recent rounds of staffing and budget cuts, municipal and school retirees across the region collected a total of $2.7 million in fiscal year 2003 for accumulated unused sick time.
Individual payouts across the region ranged from as little as $100 to upwards of $30,000. Some retirees collect full pay for each sick day, while others receive only a few dollars per day. Waltham paid $415,260 to 79 retirees, while neighboring Watertown paid $317,030 to 30 employees. Eight other communities surveyed paid more than $100,000 overall.
Defenders of buyback programs say they can actually save cities and towns from paying to cover an absent employee's shift. Paul Daigle, superintendent of the Mendon-Upton schools, said that teachers are paid $35 a day for their unused sick time, considerably less than the $75 a day the district would pay to hire a substitute.
But Daigle also said that $60,000 -- the amount Mendon-Upton paid in total to 11 retirees last year -- is enough, for example, to cover the annual salary of more than one teacher. While they support the buyback concept as an incentive, many officials recognize it can still eat up significant dollars.
"Does it create fiscal challenges? Absolutely," said Maynard Superintendent Mark Masterson.
Masterson agrees that buybacks are a useful incentive, but he noted that tight budgets in the past few years have forced the district to cut the equivalent of more than 11 teachers.
Pam Piantedosi, president of the Watertown Town Council, acknowledged that the town's payout of more than $224,000 "seems high," but said the community benefits when employees do not take time off. She said she saw the issue from two perspectives.
"This is something that they have worked toward and we need to reward that," she said, adding, "Yes, it's a budget issue and we need to work around that."
With many communities crying foul over recent cuts to state aid, Barbara Anderson, executive director of the statewide group Citizens for Limited Taxation, questions the necessity of the incentive.
"If people aren't sick, they should consider themselves lucky," Anderson said, adding that communities should deal with employees who are caught "cheating."
"It seems to me they should be fired," said Anderson. She said financially strapped towns "should stop doing things that don't make economic sense."
Short of the financial incentive, many officials say the practice of allowing employees to amass their sick time from year to year is helpful because the public sector does not typically offer short- or long-term disability benefits. If an employee is injured or becomes catastrophically ill, he or she can use accumulated sick time to recuperate.
"It's reassuring knowing that it's there if you do need it," said Needham Police Chief William Slowe.
But Slowe, who has worked in Needham for 41 years and intends to retire by November, has not needed it. He said he has not taken a sick day since 1978, and estimates he has racked up more than 400 days, of which he will be able to sell back 100 at full pay.
In most cases, communities and school systems have capped the benefit, often by limiting the number of days employees can cash in or limiting the compensation per day.
This year, the Hudson School Committee has negotiated the right to hold total payouts for all retirees to $95,000 and could deny benefits to some retirees if buybacks exceed that amount, said Cindy Fensin, the school district's payroll/personnel coordinator. (Because of a contractual issue, the Hudson schools did not impose a cap in fiscal 2003, Fensin said, and paid an unusually high total of about $138,000.)
Waltham schools have capped the benefit at $6,000 but still paid about $319,000 to 69 retirees last year, said assistant superintendent Emile Rosenberg. The system's total operating budget for fiscal 2003 was $48.5 million. Rosenberg said buybacks are not "burdensome," but could be if the district had to pay higher compensation.
Several communities and school systems do not offer buybacks at all. Others reimburse employees for unused sick time on an annual basis, rather than offering a lump sum payment upon retirement.
Ron Miller, president of the teachers' union in Natick, where the school system paid more than $103,000 to 17 employees in fiscal 2003, said the union wants to see the benefit expanded. He sees it as important in a profession that has historically underpaid its employees.
"In the public sector, it's hard to find ways to put money in the pockets of our members," Miller said.
Anne Wass, vice president of the Massachusetts Teachers Association, which has 97,000 members statewide, agreed, saying sick leave buybacks offer a deferred means of boosting traditionally low teacher salaries.
"I feel like certainly ... it's justifiable," she said. And some say it's also deserved.
Veilleux, the Milford police retiree, said he almost lost his buyback benefit when he was promoted to lieutenant, but banded together with several other ranking officers and hired a lawyer to convince the town not to rescind it. For him, it was an important fight.
"If you work on day one and they promise you something at the end, you hold them to it," he said.
The Boston Globe
South Edition
Sunday, April 25, 2004
As retiring teachers cash in, critics decry 'legalized stealing'
By Matt Carroll and Theresa Sanchez
Globe Staff and Globe Correspondent
Retiring teachers are looking forward to the end of the school year perhaps even more than their students are. After two or three decades in front of a classroom and countless hours grading tests, many will have more free time than they have had in years.
Some retiring educators also will have extra dollars to spend: They can cash in a benefit called sick-time buyback, which allows school employees to collect money for unused sick time. The benefit is a rarity in private industry, but relatively common in the public sector.
When Christine Liljegren retired last year after 35 years in the Brockton public school system, she had forgotten about the benefit, she said recently. She received more than $20,000 in the buyback.
"I was thrilled to get the money," she said.
Last year, as many schools struggled financially, seven area school systems paid out more than $100,000 each in buybacks to retiring school employees, mostly teachers, according to the systems. Brockton paid nearly $895,552 to 44 retirees, including 31 who collected more than $20,000 each. Hanover paid $336,168 to 14 people, while in Marshfield, 10 people collected a total of $251,528. (The Marshfield buybacks include five teachers who retired in 2002.)
Of 50 area and regional school systems that responded to a recent Globe survey on sick-time buybacks, 41 said they had such a program. Their plans varied widely in how much money was paid, with seven averaging more than $10,000 to each retiree, and others paying a few hundred dollars.
Critics of sick-time buybacks say the payments are an outdated way of rewarding employees simply for showing up for work. The buyback is a negotiated benefit whose time has come and gone, they say. While it is unclear when or where the practice began, some think buybacks originated in union contracts after World War II, as a benefit when pay raises were scarce.
"It is almost like legalized stealing," said Selectman Louis U. Valanzola of Rockland. "It's given them the right to take more money for something they didn't use, when sick time is supposed to be used when you are sick." In Rockland, eight School Department employees were paid $137,144 in buybacks last year.
The benefit has its defenders. Teachers, as well as some administrators, think the buybacks help curb absenteeism. They also say it is unfair to single out one benefit in a complicated contract, when it is not known what teachers might have given up in return for the benefit. And they say the costs for a school are likely to be lower in the future even when buybacks are factored in, because the salaries for new teachers are so much lower than those who are retiring.
"We need more benefits, not less, if you want people to go into teaching," said Joseph A. O'Sullivan, president of the Brockton Education Association, which represents about 1,400 teachers and some administrators. He pointed out that over the past two decades, he has twice signed contracts for his union that contained no raises. The sick-time buybacks encourage educators to stay in a profession that locally and nationally has had a hard time holding on to skilled, qualified people.
"People have literally given their whole lives to the system and paid their dues," O'Sullivan said.
The Globe surveyed school systems in 48 communities in the area, asking how many school employees retired last year and how much they were paid in sick-time buybacks. The survey found that the school systems last year paid out $3.2 million in buybacks.
But there were wide disparities. Although some teachers received up to $30,000 each, other systems paid out no money or capped the payouts at low levels.
The buybacks are expected to become increasingly costly over the next few years for many communities, because of the unusually large number of teachers who are retiring.
They are leaving not only because of their advancing years but also because of a state plan called RetirementPlus, which sweetens financial incentives to those who retire earlier in return for teachers paying more into their retirement plan. For instance, the number of retirees in Brockton is expected to double next year to between 85 and 100, at least partly because of the state plan, said representatives for the school system and union.
Statewide, 3,900 to 4,000 teachers are expected to begin collecting pensions this year, up from 1,800 in 2000, according to the Massachusetts Teachers' Retirement Board. By 2006, about 5,000 are expected to retire. Many of those teachers worked during the era of the cutbacks enacted after Proposition 2, which passed in 1980 and limited the amount of additional property tax revenue a community can raise to 2.5 percent, plus money generated by new real estate development.
The Globe survey was similar to one in February, which asked how much communities paid in sick-time buybacks to municipal workers. That survey found that at least 16 area communities paid more than $20,000 in buybacks.
The issue is not unique to Massachusetts. Public sector employees in Illinois, Pennsylvania, New Jersey, and other states have been criticized over the size of their buybacks in recent years.
Not surprisingly, the formulas governing how much a teacher can collect in a buyback are complex and vary widely from town to town. Most have restrictions that limit the amount that can be collected. In Brockton, a teacher with 20 to 24 years of experience can collect half-pay for up to 50 days of unused sick time, but a teacher with more than 30 years of experience can collect half-pay for up to 130 days. The average buyback last year was $20,353.
By contrast, tighter cap language has kept the payouts lower in Stoughton. No retiring teacher there received more than $7,300, and the average payout for a teacher was $4,089. A teacher with 15 to 19 years of employment can collect $10 a day for up to 100 unused sick days, and $40 a day for days between 101 and 300. After 20 years, a teacher can collect $20 a day for 100 days and $50 for days between 101 and 300.
"Obviously, all schools in many districts are dealing with a challenge here," said John F. McEwan, superintendent of the Whitman-Hanson Regional School District. "We need to make sure that we plan not only for what is happening tomorrow, but five to 10 years from now."
Leslie J. Molyneaux of Hanover brings a unique perspective to the issue. He is a member of the local School Committee and a retired science teacher who last year collected a buyback of $30,199 after working for 35 years. He called it a bargaining chip and a "deferred benefit" paid by the town. In return for less salary at some point, the school system offered this buyback, he said.
"It's a collective bargaining mechanism that allows an employer to postpone expenditures way into the future," he said.
His colleague on the committee, vice chairman Linda J. DiNardo, said the board has struggled to end the practice. In the mid-1990s, the buybacks for newer employees were capped at $10,000, she said.
"We hold our breath each year," hoping there is enough money in the budget to pay the retirees, she said.
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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