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1/4/2011
Alert! Time NOW to control future Appleton tax hikes
I’m concerned about the City of Appleton’s first labor pact coming up for approval for 2011 and beyond. Really beyond – a contract that goes for three years, 2011 through 2013. Changes to the current contract are listed in the report of the December 29, 2010 meeting of the Finance and Administration Committee (pp. 3 and 4).
Changes for 2011 – 2013
- 8% increase in wages over 3 years (0% in 2011, 4% in 2012 and 2013)
- 3% decrease in wages of new hires; after 5 years, if required competency tests are passed, new hires bumped to existing wage scale.
- Sick leave can be accrued only to a maximum of 135 days. (135 days? Wow.)
- Part of what used to accumulate as sick days will now be added vacation days (the Department can better manage vacation days than sick days, ideally decreasing overtime costs).
- New hires will accumulate sick leave at a rate of 6 days/year in the first 5 years as opposed to the current 12 days/year.
- Employee contribution for the most popular health plan ($500 deductible, family) is $40/month in 2011, $60 in 2012 and $90 in 2013. The current health plan is described here, pp. 26-34. For 2011 – 2013, CT Scans, PET Scans, MRI and Nuclear medicine diagnostics will no longer have a co-pay and will be covered 100%. Also, the lifetime maximum changes from $3,000,000 to unlimited.
Projected compensation costs (wages and benefits) are expected to increase .96% in 2011, 1.12% in 2012 and 3.35% in 2013. See the chart here, p. 5.
Note the assumptions used to calculate projected increases in costs: a 4% increase for health insurance costs, no increase in dental insurance costs, no change in Wisconsin Retirement Service pension charges (already 18.3% of salary contributed by taxpayers for police pensions).
Yes, the employee’s portion of the monthly premium increases from $40 in 2011 to $90 in 2013. How will the costs increase for city taxpayers? The city’s portion of the insurance premium is projected to rise from $1171/month in 2011 to $1220/month in 2013; total monthly premium is expected to go from $1211 in 2011 to $1310 in 2013.
When is the last time you saw a 4% annual increase in your health insurance charges? Do you believe that assumption, as more and more Obamacare requirements kick in? If premium increases are higher than that (which they are very likely to be), city taxpayers are on the hook.
Ditto for the 0% assumption concerning the city’s pension contributions; most folks in state and municipal government see WRS required contributions increasing in the next 2 years.
Also not included in the projections are “step increases” for officers over their first 5 years of employment. I’m told that could be offset by the 3% reduction in wages for new hires. Either way, those costs should be added to the projection.
I’m concerned about this contract – which is probably similar to contracts currently being negotiated for the city’s remaining 15 bargaining units. Before the scheduled vote Wednesday night, ask your alderperson to request a more accurate projection of taxpayer costs for 2012 and 2013. (Don’t know who your alderperson is? Check here.) Then ask how the city will pay for a 4 or 5% (or more?) increase in compensation costs in 2013. This contract, more than any other action by the Common Council, will determine your tax hikes in 2012 and 2013. Pay attention; it’s important.
Jo Egelhoff, FoxPolitics.net
COMMENTS
History has shown that as one labor contract goes the rest will follow. I have heard that the School District is looking at a four year contract, and are nearing a settlement.
David (Tue Jan 04 08:34:41 2011)
Good lord, my wife and I pay a health insurance premium of $580 a month with much higher deductibles. Do these public employees even know what they've been getting away with for all these years?
Mike P. (Tue Jan 04 09:54:28 2011)
As a taxpaying citizen living in Appleton (in Outagamie County) and a member of the Common Council, I'm very concerned about this as well. Jo, I thank you for publishing an article on this to bring awareness to it. How are we going to pay for all of this is the one question we should all be asking. One option is increasing taxes of which I will NEVER support. Healthcare costs will also play a huge factor in the total benefit costs in the coming years. We've only seen the beginning of these increases in my opinion. Hang on to your wallet...tightly. The current and proposed sick leave policy makes me feel sick. As a colleague of mine often says... "C'mon man!"
Constituents, I welcome your comments. Please send them to my City e-mail account at district14@appleton.org Otherwise, you can e-mail the entire Council from the City webpage.
Chris Croatt (Tue Jan 04 13:08:34 2011)
>>>Projected compensation costs (wages and benefits) are expected to increase .96% in 2011, 1.12% in 2012 and 3.35% in 2013.<<<
That's all, .96% in 2011? Is this over and above a Cost Of Living Adjustment?
If not, then it probably is a decrease in real wages.
Dean Weichmann (Tue Jan 04 17:12:43 2011)
Dean, have you NEVER met a cost increase in Government that you didn't like? If you subscribe to the cost projections indicated by the City's HR Director, I have a, "Bridge I'd like to sell you"! The absurity of those assumptions is unbelieveable to a,"Seasoned Labor Relations Professional". It's this kind of thinking that has led us to the point where Benefit costs for most Units of Government Employees is greater than 50% of payroll costs. A "Look BacK" at this contract 3 years from now will reveal 6-8% cost increases per year fueled by major increases in Medical Insurance and Pensions. When are you Folks going to wake up to the realities of Public Sector Unions and the massive costs to the Taxpayers?? GLS
GL Schilling (Tue Jan 04 18:54:37 2011)
GL, are you saying that the .96% increase in wages AND benefits is not correct?
>>>6-8% cost increases per year fueled by major increases in Medical Insurance and Pensions.<<<
Perhaps you know better than whoever made that projection, who was it? Is that person less knowledgable that you?
Dean Weichmann (Tue Jan 04 21:17:59 2011)
Dean (and Glenn), I think the 0.96% number is probably a good one, as health insurance premiums I believe, have been determined for 2011. Interesting though that wages and benefits were ostensibly "frozen" for 201 and still the increase is 1%. Magic. Projections for 2012 and 2013 are most likely less accurate, as I question the assumption that health insurance costs will rise only 4% and that no increases will be seen for dental insurance and required WRS contributions.
Jo (Wed Jan 05 03:19:54 2011)
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=dropmap&series_id=CUUR0200SA0,CUUS0200SA0
The above link takes you to a CPI index.
a quick look says that the increase over last year should be about 2%. That means that a 1% increase in wages and benefits will not keep up with inflation even now, thus it will be a decrease in real wages by 1%.
I grant that almost all of us are seeing drops in real income and have been for about ten years. The question is, are teachers overpaid? Given the required education, dealing with children each day, the importance of the work, and possible alternative jobs I would say no.
Dean Weichmann (Wed Jan 05 04:57:31 2011)
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