Thursday, December 18, 2008
Catherine Wilson, Bureau Chief
Where Our County Tax Dollars Are Going
Regional County Executives recently met with New York State Governor Patterson to request a reduction in state mandated programs and services that are not fully funded by the state. Most residents are aware that Westchester County taxes are the highest in the nation. On the County website, Andrew Spano, the Westchester County Executive, alleges, “Westchester would not have this dubious distinction if it were not for the fact that our property values are so high compared with the rest of the country”.
Spano also blames much of the cost of County government on state and Federal “mandates”, such as Medicaid and school aid. However, these claims are based on dubious math and incorrect analyses and belie the real problem with our County government costs.
First, it is not the “property values” that cause high taxes, as Spano would have us believe. Taxes do not necessarily have to increase in accordance with value. Some government costs are fixed, e.g., it does not cost more to collect garbage from, or run a sewer line to, a more expensive, newer
home than to a lower valued older home.
If the value of Westchester County homes truly affects our property taxes, then we would have the highest rates in proportion to value. But, according to the United States Census Bureau, Westchester County property tax rates, in relation to property values, do not even rank in the top 10.
Second, if the New York State mandates are indeed responsible for the high cost of local property taxes, then all New York State counties would be feeling this impact. According to the Census Bureau, the median property taxes for Westchester County are $8,422, indeed making our County the
highest in the nation. However, the median property tax for all New York State counties is $3,486, meaning half of the counties in New York State fall below this amount!
The New York State Office of the Comptroller notes that: “Nassau, Putnam, Rockland, Suffolk and Westchester counties have tax burdens per household that are more than twice the statewide average. The remaining downstate suburban counties, Dutchess, Orange, Sullivan and Ulster,
are also well above average. By contrast, several western and northern counties have overall burdens that are 20 percent or more below the state average”. So how can other New York State counties operate, under the same state mandates, at tax levels far below those of Westchester County?
By keeping our taxes high, Spano is actually inhibiting Westchester’s ability to collect state and federal funds for programs, such as:
• The Department of Agriculture which uses real estate taxes to determine which areas should receive direct multifamily loan assistance;
• The Department of Health and Human Services which uses real estate taxes to assess the need for housing assistance for low-income, including
elderly low-income, households. The County’s high taxes are actually one of the reasons why Westchester is not receiving more in aid for state and federal mandates. Currently, the County will receive 24.4% of its total operating revenues from New York State and the Federal government
in 2009, a total of $416,506,114.
But lower taxes and a lower tax rate would actually increase the aid to our County. So, if it’s not the state and federal mandates that are responsible for our high taxes, then what is the cause?
The benefits received by county employees are placing a burden on overtaxed residents and creating a massive social divide in our local communities; those with government benefits, and those without. County employees receive health insurance and paid time off that extend far beyond benefits in the private sector. Among those benefits, our tax dollars fund for county employees, are:
• Up to 750 paid workdays off for “employee organization leave”;
• Employee representatives are granted reasonable and necessary employee organization leave, including travel time, for the investigation of claimed grievances and processing of grievances;
• Employees are granted a reasonable amount of employee organization leave, including travel time, for the purpose of participating in mutually scheduled joint meetings of special committees;
• Employees paid on an hourly, per diem, or annual salaried basis who work a minimum of one-quarter time, but less than half-time, during their qualifying period, receive $200; work a minimum of half-time, but less than three-quarters time, during their qualifying period, receive $400; work a minimum of three-quarters time, but less than full-time, during their qualifying period, receive $600; work the equivalent of full-time during their qualifying period receive $800
• “Inconvenience” pay of $550 per year to employees who work four hours or more between 6:00 p.m. and 6:00 a.m;
• Holiday compensatory time credited for time worked on such days shall be calculated at the rate of time and one half;
• $20 additional travel expense reimbursement for each weekend employees are in overnight travel status;
• A supplemental mileage allowance rate for the use of personal vehicles for those persons eligible for such allowance when authorized to transport clients or residents, in addition to the standard IRS mileage reimbursement rate;
• Health Insurance office visit charges by participating providers will be subject to a $12 co-payment per covered individual. Office visit charges by participating providers for well child care, including routine pediatric immunizations, will be excluded from the office visit co-pays;
• Maximum enrollee coinsurance out-of-pocket expense under the basic medical component of $900 per individual or family in any one year for County Court employees, $1,292 for most other County employees, as compared to $2,000 for many local non-government health insurance contracts;
• Employees contribute $22.19 per biweekly paycheck for an individual health insurance plan as compared with many local employees who pay up to $600 a month, and more, for their own coverage;
• Employees contribute $95.10 per biweekly paycheck for family health insurance coverage whereas most local companies can no longer afford to subsidize family coverage and employees must pay the cost in full, approximately $1,800. Also, since the family members do not work for the County, the question is raised as to why taxpayers should be paying the cost of health coverage for non-government employees?
• Employees 50 years of age or older and their covered spouses/domestic partners 50 years of age or older are allowed up to $250 reimbursement annually towards the cost of a routine physical examination provided by a non-participating physician. These benefits are not be subject to a deductible and coinsurance, which begs the question, once again, why taxpayers are being asked to provide free physicals for spouses/domestic partners who are not government employees?
• Hearing aids are reimbursed up to a maximum of $1,500 once every four years;
• Free annual eye exams and free eyeglasses for every member of an employee’s family each year;
• Maximum lifetime benefits for non-network substance abuse services of $250,000, compared to zero for many local non-government
health insurance programs;
• Provide basic medical coverage for the treatment of infertility up to a lifetime cap of $50,000 compared to zero for many local non-government health insurance programs;
• Subsidizes 90 percent of the cost of individual coverage and 75 percent of the cost of dependent coverage toward the hospital/medical/mental health and substance abuse components. Most employees of local businesses have to finance 100% of the cost of coverage for their spouses/domestic partners and children;
• Subsidizes 90 percent of the cost of individual coverage and 75 percent of the cost of dependent prescription drug coverage. Many local taxpayers have no prescription coverage at all;
• Part-time employees; those who work at least half of the regularly scheduled work time, are entitled to full benefits. Most local part-time workers receive no benefits, including no health insurance or paid time off;
• Seasonal employees who work at least a half-time basis for at least six months, are eligible to apply for health insurance coverage as of the date of employment. Most local seasonal workers receive no health insurance or paid time off;
• Continued health insurance coverage will be provided for the un-remarried spouse and other eligible dependents of employees who die in government service. Local businesses offer insurance to these individuals under Federal COBRA laws where the spouse/dependents absorb the full cost of the benefits;
• The un-remarried spouse and otherwise eligible dependent children of a retired/deceased employee is permitted to continue coverage on the health insurance program with payment at the same contribution rates as required of active employees for the same coverage. These individuals, who never worked for the County at all, continue to subsidized by tax dollars after the government worker is no longer employed by the County;
• Employees may use their sick leave time to offset the cost of their health insurance. Most local workers don’t receive this benefit at all;
• Holidays: New Year’s Day, Martin Luther King Day, Lincoln’s Birthday, Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Election Day, Veterans Day, Thanksgiving Day and day after, Christmas Day – a total of thirteen (13) days, compared to most small local business holidays consisting of New Year’s, President’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving and the day after, and Christmas – a total of eight days. By simply reducing paid holidays to eight days from thirteen, a savings of one work week, the County could reduce staff and costs without affecting productivity or level of services
• Employees also receive two “floating” holidays in addition to the days above;
• Employees can accumulate sick leave up to a total of 200 days. Employees can use up to 200 days of such credits for retirement service credit and to pay for health insurance in retirement. Most local workers do not have any sick time and must use their two weeks of vacation time to cover this. If they do have sick time, it’s on an annual “use it or lose it” basis, and may not be accumulated year to year;
• Government employees also receive personal leave, leave for adoptions, funeral leave, jury duty leave, time off to vote, three days to renew licenses and professional requirements, such as the continuing education requirement for lawyers. Most local professionals squeeze in these courses
at night and weekends, even taking audio courses while commuting!
• Employees are reimbursed for professional training and annual certification fees, even if they are basic requirements for obtaining their jobs. Most small business employees pay their own costs; • Employees receive four hours off for annual mammograms. In contrast, most local workers who are expected to attend to medical exams on their own personal time;
• Many local government workers receive a minimum of four weeks vacation. In addition, the County Courthouse closes for the week between Christmas and New Year’s, giving those employees an additional paid week off. All vacation time may be accumulated and the employee may receive a lump sum check for their unused vacation time upon their retirement, paid at the latest rate of pay, not at the rate of pay at which that time was earned. Most local workers are on a “use it or lose it” basis and may not accumulate their unused vacation time;
• Overtime meal allowances for employees who work at least three hours overtime on a regular work day or at least six hours overtime on other than a regular work day. Most local employees do not get this benefit;
• Annual benefits, up to $600, to defray dependent care costs
• Overtime pay for most levels of staff, even those at high rates of pay. Most local employees now work a standard 50 hour week, 70 for professionals, without any additional compensation. They feel lucky to have a job in this economic environment;
• A government contribution of $212.50 per employee to employee’s organizations; • Employees receive one hour paid lunch breaks;
• Employees receive compensation for uniforms and equipment. Local office workers are not reimbursed for the cost of their suits and briefcases;
• Employees may deduct the cost of their health insurance premiums pre-tax, and allocate up to an additional $4,000 in pre-tax dollars to a health fund for expenses such as orthodontia;
• Fully financed pensions. Most local businesses do not have pension plans so employees must struggle to contribute to 401K’s. As funds in the County pensions drop with the stock market decline, the government contributions will increase to compensate. At a time when local residents have seen their own retirement funds decline, they will be expected to contribute even more to the pensions of County workers.
• Many employees receive subsidized phones, computers, cars, and houses. The Guardian has requested a complete inventory of all County houses, many of which are located in County parks, and the names of the individuals residing in those residences, and the amount, if any, of rent paid by them to the County for the use of these properties;
• Employees receive free life insurance, with coverage up to three times their annual salaries
• In addition to the above, the County also pays employment taxes, such as FICA, and provides unemployment and disability insurance for employees. The County budget provides only a brief analysis of what these benefits cost taxpayers:
Retirement costs: $34,883,259
Payroll Taxes: $27,464,958
Health Insurance: $91,147,315
Employee Benefit Fund: $2,727,125
Unemployment Insurance: $500,000
Other (Disability) Insurance: $959,122
Total Employee Benefits: $157,681,779
With only 4,912 employees on the County payroll, that’s an average cost of $32,101.34 for each and every employee in benefits!
Depending on the department, and the salaries of the employees, the distribution of County benefits fluctuates. The County Legislators have salaries of $3,998,153 in their 2009 budget for their 57 employees, and benefit costs of $1,758,881, meaning their staff receives an additional 44% in mostly non-taxable benefit compensation on top of their base salaries. Not only do most local taxpayers have to pay for the cost of their
own benefits, they also do not receive any tax breaks for most of those payments, increasing their economic burden even further.
In the chart below, compare two fifty-year old employees, one County government, and one small business worker, both making $70,000 a year
For some reason, County government is continuing to expect local non-government employees to be able to afford to pay the average $8,422 in local property taxes. The only way the average local worker can afford to continue to subsidize County employees is if we forego our own benefits, at the risk of our families, our health, and our retirement.
Isn’t it time the County addresses the real problem mandates in its budget? Isn’t it time we cut the benefits the staff is receiving and bring those benefits in line with those being offered to local taxpayers in their place of business? We cannot afford to pay for benefits of non-County employees which may be illegal if not mandated by County charter. We cannot afford to subsidize carryover plans for excessive vacation and sick leave policies and fund high cost health and pension plans. Westchester residents can no longer afford to subsidize these unrealistic benefits and the social and socio-economic divide they create among us.