Unions must help ease tax burden

The people who benefit most on Long Island are government officials & employees, school officials and teachers, and police officers. What do all of these people have in common? These are all positions that are supposed to serve the public good. Yet, these are now the highest paid people on average in Long Island. Yes the average private sector wages are now dwarfed by the average wages of all of these professions. In addition, public sector personnel are guaranteed cost of living increases and generous benefits regardless of the tax burden on the residents. Why? because these personnel are members of powerful unions whose political clout is legendary. No politician is willing to risk political suicide by treading on the “rights” of the unions.

Human resources – wages and benefits – are 60-70% of an organization’s operating expense be it a major corporation, government or quasi-government agency. We routinely hear of private enterprises cutting costs through attrition and as a last resort, layoffs. Yet, public agencies cannot effectively reduce their budgets (which in turn would reduce taxes) because they can never touch the most expensive part of the budget, union-protected wages and benefits. What’s left is cutting costs through the reduction of services, services that are very often popular and/or vital like when a school district threatens to cut art, music or sports. These savings of course are miniscule and can never offset the annual wage increases and perks stipulated by the unions. Yes, the unions are doing their job by protecting the wages and benefits of their members. However, it cannot be that those wages and benefits become a tax burden to the very people they are supposed to serve. The purpose of the union was to equalize the earnings of their public sector members in light of what they would be earning in the private sector, not to have earnings that are above and beyond the call of duty, literally.

The fact is we have to cut taxes. We have to think smart about how we are going to rein in these costs. Our elected officials must appeal to the unions to come to their senses for the public good by starting with some reasonable fixes. One is to have public sector workers contribute a greater portion of their health and retirement benefits just like those workers in the private sector. Every one from top to bottom with no grand-fathering could pay a percentage. If everyone active and retired paid a small percentage that would return millions to the public coffer for all to benefit – not some. Another painless solution is for unions to give greater leeway to public agencies to reduce personnel through attrition instead of demanding that those jobs remain on the books. We have to start somewhere.

Gauging the economy

Where do you turn if you want to get a real reading on the economy? Against the backdrop of the housing crisis, the credit crunch and the rise in gasoline prices, the economic reports are giving the stock market whiplash. The employment report is worse than expected, stocks tumble. The economy actually ticked up a little last quarter, stocks rise. Gigantic Corporation A misses earnings by a few cents, the market sinks. Gigantic Corporation B reports good news, the market soars.

At the end of it all though, the market is still lower than it was at the beginning of the year. Some economists report that things aren’t as bad as they seem, other economists report that things are going directly the other way. In short, the experts cannot make heads or tails and we the people are left to navigate on our own.

How is the Middle Class on Long Island surviving?

How is the middle class on Long Island surviving? I want to know. How is everyone managing the tax burden, the oil and gasoline bills, housing costs and basic necessities? Some years back, my husband agreed to a 2 hour commute to NYC for work so that we could purchase an affordable house way out here in Suffolk County. We deliberately made sure that we were not going to be house poor. To that end we locked in a low rate fixed mortgage and spent years fixing up the house ourselves to limit renovation costs. We even replaced the boiler and put in new windows to save on heating costs. We spent frugally and minimized our credit card debt. We even replaced our aging (more expensive) vehicles with cheaper vehicles. We didn’t take fancy vacations, in fact, we barely took any. Those we did take involved driving and staying in modest accommodations. We wanted to save for a rainy day since my husband works in an industry riddled with debt and constant layoffs. We wanted to save for college for our children. We didn’t want them to be saddled with the debt that we still have all of these years later.

Over the next few years, the cost of heating oil and gasoline tripled and our taxes increased significantly. Now food costs are on the rise, our house prices are falling and our savings invested in the stock market are decreasing in value. I still see people shopping and spending all around me. My daughter wants designer clothes because all the girls at school are wearing them. I want to ask these mothers how they are affording it all. Maybe I did something wrong and missed the boat somewhere. Maybe because I moved here in this decade that my housing costs are higher than those who grew up out here. I figure there has to be an explanation. My inquiring mind wants to know because our quality of life is going down not up despite everything we have done to achieve the opposite.

All I know is that I am starting to think harder and harder about suburban life and whether the taxes, commute, and everything are worth it. Don’t get me wrong, I like it out here. I was always happy to be living in vacationland, knowing that I didn’t have to leave the Island in the summer if I didn’t want to. Knowing I had all the amenities to have a great vacation right here at home. That was part of the allure of moving out here in the 1st place. We didn’t need to go anywhere else for a summer vacation especially when people were clamoring to vacation out here. The biggest downside to all of this is now more people are going to be sticking around or coming to vacation out here this summer since it is too expensive to go anywhere else. That may upset my pleasant world a little.

Nevertheless, I need to be enlightened by my fellow middle class dwellers and maybe together we can make some sense of all of the rising costs and what we plan to do about it.

Property Tax Grievance

Last week my husband and I were lucky enough to file a grievance with the Town Assessor to reduce our property taxes. We had received a deluge of mail from many law firms and agencies offering to file on our behalf. In return the typical fee is 50% of your 1st year tax savings plus any appraisal fees if required. Of course, if your taxes are not reduced then you pay nothing. It is a win-win situation since you have nothing to lose and everything to gain. My husband thought it was a great idea and that we should sign up with one of these firms. I figured that I should research the matter and do it myself since that’s the type of person I am. Somehow, I had the date of May 20, 2008 in my head. It was the deadline stated on all of these offers. On May 19, I finally got around to my research only to find that May 20, 2008 was the absolute deadline for filing with my Town and that the grievance period began on May 1st. Great! I had no choice but to show up the next day and take my chances with the process.

I arrived in the rain with great trepidation because I was unprepared. Also, because it was the last day, I had no chance to fix any issues that may arise. I was pleasantly surprised. For all of the typical complaining about government employees, those at my Town Assessor’s office were stellar. Though the line got long at times, they patiently helped everyone along who needed it. If you couldn’t grasp the computer, if you couldn’t fill out the application, if you couldn’t grasp one single iota of the process, it did not matter. The Assessor’s office helped you with everything. It was incredible. Even when the waiting line for the computers got too long, residents were led to the back office to use the employees’ personal computers.

Luckily, I found the process to be simple. First, you are given an application and led to a computer to look up your address to get your tax id# (if you didn’t bring your tax statement with you) and your assessed valuation. The assessed valuation is the multiplier used to calculate the dollar amount of taxes owed. Using the valuation, the
assessed value (the current market value as deemed by the Assessor) of your property is calculated. I couldn’t believe the amount that my house was assessed, close to $100,000 more than I thought is was worth. This was a good sign that I might have a case. In my town, you also received a list of all the sales of homes in your zip code during the past year. It was your job to find 3 comps, 3 homes as similar to yours as you can find in your neighborhood that sold for less than the amount your home is currently valued by the Town Assessor. The same process an appraiser uses to qualify the value of your home. You were given the opportunity to use the computer again to verify the 3 homes you had chosen to get additional details to complete the application. You could also attach a recent copy of an appraisal if you had one. The final step was for you to value your home based on the comps that you picked and that was it.

Your application then goes to the Assessment Review Board for approval. I was concerned that some of the comps that I picked had higher assessed valuations than my house. However, the state of New York sets the rules for property tax grievance. Only the current market value of your home and other homes in the area can be used to determine if your house is overvalued. I hope that I am approved for this year. It will be a great help. If not, I will definitely try again next year. I couldn’t believe that there were so many firms and agencies making so much money for a process that was so simple, at least in my town.

Memorial Day

As I sit here this Memorial Day, I am trying to recall the purpose of the holiday - to remember men and women who have perished while in military service to their country. I do this because going into the holiday I did not give it a second thought. This is one of those holidays where inevitably someone has to remind us of the real meaning of the holiday and why it is important. Like most Americans, I was thinking about what we were going to do for the weekend, barbecues, shopping bargains, family and friends and of course, going to the beach if it is warm enough. The joys of this weekend, the unofficial start of summer, have eclipsed the meaning of the day. If any Memorial Day commemorations happen to cross our paths, they generally emphasize the memory of wars past.

But, we do have a war going on right now. Unfortunately, the Iraq War has been mismanaged and the news coverage manipulated, the war never took its rightful place as being foremost in the public consciousness. Unlike Vietnam and the world wars, the administration did us a disservice by limiting our access to the realities of war. We could not make a real connection to the war. We could not witness our fallen soldiers returning to a hero’s burial. The horrors of this war have been limited to the military and military families. And while these new casualties of war become those to be remembered on memorial day, most of us will push on happily shopping and barbecuing with nary a second thought.

Suffolk County Police Overpaid?

Steve Levy, Suffolk County Executive, published an editorial in The Smithtown News on May 8, 2008 in response to the Suffolk County Police union (PBA) propaganda that the County was placing the public in jeopardy by understaffing the police department. In this letter he put in the specifics of what Suffolk County police officers earn.

“It costs the county an average of $144,000 in wages and benefits (not including overtime and up to 12 percent in night differential pay) to place a single police officer on the street.

Police Officers get up to 89 paid days off a year, including five personal days, 26 sick days, up to 30 vacation days and 28 chart days. These paid days off do not include the 13 holidays.

The law enforcement contracts allow some individuals to collect up to $300,000 in unused sick, vacation days and other paid time upon their retirement.”

These numbers are outrageous. I know police officers have a tough job but these are suburban police officers, they are not working in a major city. Levy states that the PBA union has been getting its way in negotiations for decades and that these generous contracts have “made us one of the highest taxed regions in the nation. It is my intent to put a stop to these [contract] giveaways that have been crippling our local economy and forcing so many of our families off of Long Island.”

The PBA has run amok with its demands and claims. I certainly do not feel like the police department is understaffed. Everywhere I go I see plenty of Suffolk County police vehicles. Every time I pass a traffic accident these days, there are at least six to eight police cars responding and blocking the road. We cannot let unions like the police, teachers’ and others continue to gouge the public purse.

School Budget Increases Approved without a Fight

How is it possible that the majority of school budgets with increases of 4% and above were passed when the price of gas, heating oil and food have risen so sharply? How could anyone vote to increase taxes on top of the increases of everything else? Last year school budget increases were resoundingly defeated. Now with the economy on the verge of recession, we don’t put up a fight. The only people who win here are the teachers and administrators. They get their cost of living increases and continued stellar benefits while those in the private sector contend with stagnant wages and eroding benefits. Why are we so helpless when it comes to the school budget? Everyone wants the best teachers and educational experience for their children. But should it come at such a high price?

In Suffolk County the average teacher pay is close to $70,000. I don't know if people do the math but that is for 10 months work and I know I'm being generous about the actual time worked considering the myriad of school vacations. Based on a 12 month scale that amount would be the equivalent of $84,000 a year not to mention the generous benefits and pensions. Years ago teachers were dedicated to the education of our young people and did so for low wages as did most who worked in the public sector. In return for their dedication and the apparent economic sacrifice of giving up a more lucrative private sector job, they received lifetime benefits and pensions. Now the tables are upside down. Not only are they are making much more than the average private sector worker, they are still getting the lifetime benefits and pensions. The teachers union claims that these wages are necessary to attract good teachers. Now we pay so much more in taxes than the rest of the country so our children can supposedly get a better education which is now making the tax burden so high that these same children can’t afford to live here once they graduate. This does not make any sense.

Long Island was a middle class haven where for decades those with decent employment could live and raise their families in a comfortable existence. Now the average middle class family struggles to have a lifestyle they can no longer afford, where they live in homes that they couldn’t afford if they were to purchase them today and where their children graduate from college and return to the family home to take up residence in the basement because they can’t afford any other place to live. In the public sector, there is no incentive to trim costs, check the bottom line or boost productivity when you can just keep raising taxes.

Public Sector Payrolls Getting too High?

The following excerpt is from the Newport News, Va., Daily Press reprinted in Newsday May 13, 2008:

Local government employees should tighten their belts, too
Once upon a time, government employees traded high salaries for job security, time off, and better health insurance and pensions. Now, they have it all, earning more on average than private-sector workers and getting regular raises, while workers in private enterprise have seen their earnings lag behind inflation.

Some local officials get their obligations confused, and dwell too much on preserving the jobs and salaries of local employees. Certainly, attracting and inspiring good public servants is vital, but the job of elected representatives is to deliver the best services at a price taxpayers are willing and able to pay. When elected officials put employees' interests before taxpayers' interests, payroll costs can push budgets — and taxes — so high they drive away the businesses and middle-class workers who provide the lifeblood of a locality's economy and work force.

That's the kind of thinking that threw Vallejo, Calif., into bankruptcy last week, the kind of thinking that it took New York City years, and massive bailouts, to recover from. It's the kind of thinking that's burdening taxpayers in many localities with excessive bills for payroll and benefits.

Government employees must be treated with fairness and respect. But their needs must be balanced with the larger mission of government, which is to provide needed services without breaking the taxpayers' financial backs.

This article makes many good points. And, if you don’t think this applies to Long Island, here is the data for Long Island from 2005:

The following excerpt is from a research bulletin by the Empire Center for New York State Policy 9/1/06

Average Annual Salary in 2005
New York State & Local Government v. Private Sector
Region	State Government	Local Government	State & Local Government	Private Sector
Long Island	$49,354.00	$52,682.00	$52,256.00	$43,161.00
Nassau	$52,567.00	$55,335.00	$55,194.00	$44,449.00
Suffolk	$48,652.00	$50,118.00	$49,837.00	$41,846.00

and the following conclusions:

• The region with the greatest differential between public and private salaries is the Mohawk Valley, where state and local government jobs pay 124 percent more than private-sector jobs, on average. The runner-up in this category is Long Island, where the average state-local salary is 121 percent of the average private-sector salary.
• The highest-paying local government jobs in New York State are found in New York City, Long Island and the lower Hudson Valley.

This is absolutely unsustainable for the rest of us in the private sector to bear. These public sector employees get job security, cost of living increases, generous sick and vacation days, generous health insurance benefits and in some cases vehicles, gas and cell phones. Not to mention the mother of all bonuses, pensions with lifetime benefits. We hear the same justification for their high salaries and benefits - how can they continue to provide these vital community services if they cannot afford to live on Long Island? If we continue to accept this argument, we in the private sector definitely won’t be able to afford to live on Long Island either.