04/07/2014
The figures are self-reported by towns and don’t represent every municipality, but they provide a good picture of taxpayers’ obligations if the status quo continues. Bergen County towns reported owing nearly $98 million, and Passaic County towns owed around $37 million at that time, the data showed.
Those figures don’t include school administrators and teachers, whose payouts are more difficult to come by. Neither the state Department of Education nor the New Jersey School Boards Association track district liabilities.
Though local officials approved the benefits, some municipalities weren’t prepared for such huge payouts.
In 2012, Paterson borrowed more than $2.8 million to pay 34 retiring police officers and firefighters. Last month, officials borrowed an additional $1.65 million to cover accrued leave for nine firefighters and eight officers. In all, the city has issued about $11 million in bonds over four years — actions that will cost taxpayers nearly $702,000 in interest.
Hackensack issued a $4.7 million bond in 2010 to cover six-figure payouts that ranged from $201,515 to $308,131 for several police officers and longtime city employees. The loan will cost the average homeowner about $255 over five years.
And in the early part of this decade, Saddle Brook borrowed $700,000 to finance nearly $810,100 in payouts to 10 retirees for unused sick days. It should be repaid by 2016, said Peter LoDico, the township administrator. Saddle Brook taxpayers also will have paid more than $26,000 in interest, according to an analysis by The Record using township figures.
Jerry Cantrell, president of the Common Sense Institute of New Jersey — a non-partisan research-and-education non-profit that receives support from individuals, private foundations and businesses — said governing bodies can ill afford to continue at this pace. Government agencies must operate within a budget, and excessive payouts could force them to compromise critical services, said Cantrell, whose group advocates for fiscal reform.
“Sooner or later, chickens come home to roost,” he said. “There’s going to be a tipping point.”
Towns impose caps
To stem the payouts, most municipalities want to limit sick time cash-outs for recent hires. Last month, Hackensack officials capped sick-day payments at $15,000 for non-union employees hired after Jan. 1, 1987. Officials hope to negotiate the same cap with unionized employees.
North Bergen, meanwhile, has a $40,000 ceiling for sick time for police officers and a $20,000 cap for civilian employees. And since 2011, certain Saddle Brook employees who were once allowed to cash in 225 sick days are now limited to $12,000, LoDico said.
But some say that’s not enough. Several elected officials and policy experts want to do away with sick-day payouts altogether.
“If you have the good fortune of not getting sick, you should thank your lucky stars and move on,” said Cantrell, who argued the benefit is for emergencies, and not to pad an employee’s severance pay.
Governor Christie agrees. He wants to scrap sick-pay buyouts for future public employees and reduce them for current workers. His call for changes has received bipartisan support, though legislators remain split on the terms. Certain state employees are now capped at $15,000 for unused sick time and can carry over only a year of vacation.
Sens. Gerald Cardinale, R-Demarest, and Brian Stack, D-Hudson, are sponsoring a bill that would eliminate sick-leave payouts, cap the rollover of vacation time and limit the use of sick leave the year before someone retires. It also would require employees to forfeit unused sick and vacation days if convicted of a crime affecting public office. The bill was introduced in January and referred to the Senate State Government, Wagering, Tourism and Historic Preservation Committee.
Mark Albiez, a spokesman for Stack, said the Legislature must make changes to the system so taxpayers aren’t stuck footing the bill for exorbitant payouts.
“It’s not like that in private industry,” he said. “It can’t be done that way in public employments.”
That the proposed bill has gotten bipartisan support indicates there is strong consensus for reform, Albiez said.
“It’s universally recognized that residents need relief and that legislation is warranted,” he said.
The New Jersey State Firefighters Mutual Benevolent Association is open to changes for new hires, but it “will never support taking away benefits that our members have earned already,” said President Ed Donnelly.
Meanwhile, the New Jersey State Association of Chiefs of Police has not taken a position on caps. However, Raymond Hayducka, the association’s spokesman, said municipalities are smart to make annual payouts, rather than allow individuals to collect a lump sum at retirement, when pay scales are higher.
He defended the practice of cashing in unused time, saying it’s an incentive for employees not to take time off for minor illnesses.
“As a police administrator, I appreciate a police officer who does not use his sick time,” he said. “When an officer is out sick, pretty often we pay someone else overtime.”
Ingrasselino, the retired Elmwood Park chief, recalled the many times he and his colleagues were denied time off.
“We were forced to not use vacation because we were shorthanded,” he said. “I came into work many times sick because we were so shorthanded.”
As a compromise, municipalities should allow employees to cash in unused days annually, but limit buy-back days, Ingrasselino said. In other words, an officer with 15 unused sick days at the end of the year could be paid for three days, he suggested.
Reform has also entered the educational circle. Most school superintendents now face a $15,000 cap on sick-day payouts — a measure that the New Jersey Association of School Administrators supported, said Executive Director Richard Bozza. But those public employees also benefited from handsome payouts not too long ago.
Robert Aloia, the former superintendent of the Bergen County Technical Schools district, took home $216,148 in benefits during 2008 and 2009. He also received about $300,000 in deferred compensation after he left the district.
The school administrators association hasn’t decided if sick payouts should be eliminated entirely, but Bozza noted some research suggests that giving employees an incentive not to call in sick helps districts avoid hiring substitute teachers.
Tough timing
The New Jersey School Boards Association has supported legislation to restrict payments not only of unused sick leave but vacation time, and others agree vacation rollover should be limited.
“I don’t have a problem with someone rolling over a week here to next year, but the problem with these huge payouts, with people leaving with $700,000 or $300,000 or $200,000, is wrong and it’s an abuse of the taxpayers’ trust,” said Cantrell, of the Common Sense Institute.
Hackensack wasn’t prepared when a number of employees decided to cash in all at once. The city is saddled with $15 million in debt to cover those payments. In January, the City Council agreed to pay its former city manager, Stephen Lo Iacono, $74,683 in unused vacation and sick time and its former city clerk, Debra Heck, nearly $32,000 for unused vacation and sick days and 35 overtime hours.
In recent years, the city has paid $93,000 to its welfare director, Agatha Toomey, and more than $94,000 to former Police Chief Ken Zisa — who was convicted of official misconduct, insurance fraud, conspiracy and witness tampering — for unused sick time.
Wood-Ridge officials hope to avoid a similar burden. Police officers hired before 2013 can’t cash out more than six months’ salary for sick time. But those hired after that date receive nothing, said Borough Administrator Chris Eilert. In 10 to 15 years, “we’ll have nobody left in the borough who will have any right to payouts,” he said, adding that the union supported the move.
In addition, employees can’t roll over more than two weeks of vacation to the next year and generally can’t cash them in, Eilert said.
Paterson Councilman Kenneth Morris Jr. proposed lumping all leave time — vacations, personal, sick or comp days — into a single “benefit time” category and limiting it. Generous benefits packages were established decades ago to compensate public employees for low wages, but today, many make six figures, Morris said.
“The only way we can afford this is posting bonds, so we’re passing the expense on to our children,” he said. “If this continues, it’s going to lead to bankruptcy on the part of many municipalities.”
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It’s a practice that’s unheard of these days in the private sector — carrying over days, weeks, even months of unused leave time and collecting a hefty check at retirement. Yet it’s common for public employees, who continue to cash in at taxpayers’ expense.
A series of six-figure payouts that have forced towns to borrow millions of dollars have placed a renewed focus on the perk afforded to public workers for decades.
As the cases have mounted, the Legislature has yet to strike a deal for statewide reform. It’s a tug of war between those who want to scrap the benefit entirely and others who want to preserve it for existing longtime workers. Somewhere in the middle are town officials who are left to make up their own rules and negotiate with unions, while struggling to keep property taxes in line.
A 2 percent cap on property tax levy increases has put the pressure on towns to stop the payouts. At the same time, a loophole allows them to borrow the money — a quick fix that will pile on years of debt for taxpayers.
Change at the local level has been slow, while recent payouts have continued to be staggering:
Municipalities throughout New Jersey had an estimated liability of at least $880 million in unused vacation and sick time for its employees in 2011, the most recent data available from the state Department of Community Affairs.A series of six-figure payouts that have forced towns to borrow millions of dollars have placed a renewed focus on the perk afforded to public workers for decades.
As the cases have mounted, the Legislature has yet to strike a deal for statewide reform. It’s a tug of war between those who want to scrap the benefit entirely and others who want to preserve it for existing longtime workers. Somewhere in the middle are town officials who are left to make up their own rules and negotiate with unions, while struggling to keep property taxes in line.
A 2 percent cap on property tax levy increases has put the pressure on towns to stop the payouts. At the same time, a loophole allows them to borrow the money — a quick fix that will pile on years of debt for taxpayers.
Change at the local level has been slow, while recent payouts have continued to be staggering:
- The outgoing Cliffside Park police chief, Donald Keane, last year negotiated a severance package totaling $262,630. It included $122,476 in unused vacation, sick days and compensatory time, along with retroactive raises and six months of terminal leave.
- Seven retiring police officers in Elmwood Park claimed $1.2 million in 2011 for unused time off. Among them: Police Chief Donald Ingrasselino, who took home $289,264 after 36 years.
- Closter’s retiring police chief, David Berrian, negotiated a nearly $195,000 package that same year for unused sick and vacation days and other payments.
- The Paterson City Council paid outgoing Police Chief James Wittig $135,937 for unused sick, compensation and personal-leave time in 2011.
- State Sen. Nicholas Sacco, who is also the mayor and a school district administrator in North Bergen, has accrued more than $143,000 in unused sick time after nearly 45 years. In a 2012 newspaper report, he said the potential payout was not excessive, considering his “nearly perfect attendance record.” Sacco also traded in 91 of his unused vacation days for $101,504 over five years, the report found.
The figures are self-reported by towns and don’t represent every municipality, but they provide a good picture of taxpayers’ obligations if the status quo continues. Bergen County towns reported owing nearly $98 million, and Passaic County towns owed around $37 million at that time, the data showed.
Those figures don’t include school administrators and teachers, whose payouts are more difficult to come by. Neither the state Department of Education nor the New Jersey School Boards Association track district liabilities.
Though local officials approved the benefits, some municipalities weren’t prepared for such huge payouts.
In 2012, Paterson borrowed more than $2.8 million to pay 34 retiring police officers and firefighters. Last month, officials borrowed an additional $1.65 million to cover accrued leave for nine firefighters and eight officers. In all, the city has issued about $11 million in bonds over four years — actions that will cost taxpayers nearly $702,000 in interest.
Hackensack issued a $4.7 million bond in 2010 to cover six-figure payouts that ranged from $201,515 to $308,131 for several police officers and longtime city employees. The loan will cost the average homeowner about $255 over five years.
And in the early part of this decade, Saddle Brook borrowed $700,000 to finance nearly $810,100 in payouts to 10 retirees for unused sick days. It should be repaid by 2016, said Peter LoDico, the township administrator. Saddle Brook taxpayers also will have paid more than $26,000 in interest, according to an analysis by The Record using township figures.
Jerry Cantrell, president of the Common Sense Institute of New Jersey — a non-partisan research-and-education non-profit that receives support from individuals, private foundations and businesses — said governing bodies can ill afford to continue at this pace. Government agencies must operate within a budget, and excessive payouts could force them to compromise critical services, said Cantrell, whose group advocates for fiscal reform.
“Sooner or later, chickens come home to roost,” he said. “There’s going to be a tipping point.”
Towns impose caps
To stem the payouts, most municipalities want to limit sick time cash-outs for recent hires. Last month, Hackensack officials capped sick-day payments at $15,000 for non-union employees hired after Jan. 1, 1987. Officials hope to negotiate the same cap with unionized employees.
North Bergen, meanwhile, has a $40,000 ceiling for sick time for police officers and a $20,000 cap for civilian employees. And since 2011, certain Saddle Brook employees who were once allowed to cash in 225 sick days are now limited to $12,000, LoDico said.
But some say that’s not enough. Several elected officials and policy experts want to do away with sick-day payouts altogether.
“If you have the good fortune of not getting sick, you should thank your lucky stars and move on,” said Cantrell, who argued the benefit is for emergencies, and not to pad an employee’s severance pay.
Governor Christie agrees. He wants to scrap sick-pay buyouts for future public employees and reduce them for current workers. His call for changes has received bipartisan support, though legislators remain split on the terms. Certain state employees are now capped at $15,000 for unused sick time and can carry over only a year of vacation.
Sens. Gerald Cardinale, R-Demarest, and Brian Stack, D-Hudson, are sponsoring a bill that would eliminate sick-leave payouts, cap the rollover of vacation time and limit the use of sick leave the year before someone retires. It also would require employees to forfeit unused sick and vacation days if convicted of a crime affecting public office. The bill was introduced in January and referred to the Senate State Government, Wagering, Tourism and Historic Preservation Committee.
Mark Albiez, a spokesman for Stack, said the Legislature must make changes to the system so taxpayers aren’t stuck footing the bill for exorbitant payouts.
“It’s not like that in private industry,” he said. “It can’t be done that way in public employments.”
That the proposed bill has gotten bipartisan support indicates there is strong consensus for reform, Albiez said.
“It’s universally recognized that residents need relief and that legislation is warranted,” he said.
The New Jersey State Firefighters Mutual Benevolent Association is open to changes for new hires, but it “will never support taking away benefits that our members have earned already,” said President Ed Donnelly.
Meanwhile, the New Jersey State Association of Chiefs of Police has not taken a position on caps. However, Raymond Hayducka, the association’s spokesman, said municipalities are smart to make annual payouts, rather than allow individuals to collect a lump sum at retirement, when pay scales are higher.
He defended the practice of cashing in unused time, saying it’s an incentive for employees not to take time off for minor illnesses.
“As a police administrator, I appreciate a police officer who does not use his sick time,” he said. “When an officer is out sick, pretty often we pay someone else overtime.”
Ingrasselino, the retired Elmwood Park chief, recalled the many times he and his colleagues were denied time off.
“We were forced to not use vacation because we were shorthanded,” he said. “I came into work many times sick because we were so shorthanded.”
As a compromise, municipalities should allow employees to cash in unused days annually, but limit buy-back days, Ingrasselino said. In other words, an officer with 15 unused sick days at the end of the year could be paid for three days, he suggested.
Reform has also entered the educational circle. Most school superintendents now face a $15,000 cap on sick-day payouts — a measure that the New Jersey Association of School Administrators supported, said Executive Director Richard Bozza. But those public employees also benefited from handsome payouts not too long ago.
Robert Aloia, the former superintendent of the Bergen County Technical Schools district, took home $216,148 in benefits during 2008 and 2009. He also received about $300,000 in deferred compensation after he left the district.
The school administrators association hasn’t decided if sick payouts should be eliminated entirely, but Bozza noted some research suggests that giving employees an incentive not to call in sick helps districts avoid hiring substitute teachers.
Tough timing
The New Jersey School Boards Association has supported legislation to restrict payments not only of unused sick leave but vacation time, and others agree vacation rollover should be limited.
“I don’t have a problem with someone rolling over a week here to next year, but the problem with these huge payouts, with people leaving with $700,000 or $300,000 or $200,000, is wrong and it’s an abuse of the taxpayers’ trust,” said Cantrell, of the Common Sense Institute.
Hackensack wasn’t prepared when a number of employees decided to cash in all at once. The city is saddled with $15 million in debt to cover those payments. In January, the City Council agreed to pay its former city manager, Stephen Lo Iacono, $74,683 in unused vacation and sick time and its former city clerk, Debra Heck, nearly $32,000 for unused vacation and sick days and 35 overtime hours.
In recent years, the city has paid $93,000 to its welfare director, Agatha Toomey, and more than $94,000 to former Police Chief Ken Zisa — who was convicted of official misconduct, insurance fraud, conspiracy and witness tampering — for unused sick time.
Wood-Ridge officials hope to avoid a similar burden. Police officers hired before 2013 can’t cash out more than six months’ salary for sick time. But those hired after that date receive nothing, said Borough Administrator Chris Eilert. In 10 to 15 years, “we’ll have nobody left in the borough who will have any right to payouts,” he said, adding that the union supported the move.
In addition, employees can’t roll over more than two weeks of vacation to the next year and generally can’t cash them in, Eilert said.
Paterson Councilman Kenneth Morris Jr. proposed lumping all leave time — vacations, personal, sick or comp days — into a single “benefit time” category and limiting it. Generous benefits packages were established decades ago to compensate public employees for low wages, but today, many make six figures, Morris said.
“The only way we can afford this is posting bonds, so we’re passing the expense on to our children,” he said. “If this continues, it’s going to lead to bankruptcy on the part of many municipalities.”
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