PBA: New Legislation Unfair to Public Workers Already Paying Higher Costs

With the recent approval in both the Senate and Assembly of a bill calling for , Policemen’s Benevolent Association President Officer John Mitzak said this is just changing the game halfway through and it’s unfair.

“When it comes to contributing to the pension, I have no problem with that,” he said. “But my feeling with the health care benefits is that's something that has always been negotiated with the township and I don’t think it’s fair that it is now something the state is imposing on us. This is something we could have negotiated with the township.”

The bill, A-4133, will require teachers, school employees and state and local government workers to pay an additional 1 percent of their salaries toward their pensions as of July 1, and an additional 1 percent phased in over the next seven years for a total of 7.5 percent.

Police and firefighters will pay an additional 1.5 percent of their salaries toward their pensions for a total of 10 percent, as of July 1. The bill moves the retirement age for new teachers and non-uniformed employees from 60 to 65 years old. To be eligible for early retirement, the employees now have to work 30 years instead of 25.

Mitzak said he understands that there are rising costs in the state, but imposing these kinds of payments—rather than continuing to allow for negotiations with the local governing bodies—is unfair.

“Nobody’s happy about this,” he said. “When you take this job, you know that you will contribute to the pension.”

“But I think the public has been misinformed and thinks we get a free pension,” he added of criticisms from residents in the state that public workers do not pay enough.

Since the beginning, Mitzak said, police officers have been paying 8.5 percent to their pensions every year—this new bill increases that to 10 percent.

And other unions, Mitzak said, are not paying anywhere near that amount.

“Other unions contribute at a lower percentage,” he said. “Everyone should contribute a fair percentage and that’s another issue. The police are paying the highest amount toward the pensions, and we have always paid.”

The bill will have a more significant impact on the cost of health benefits, as it requires all public employees and certain public retirees to contribute toward the cost of health care benefits coverage based upon a percentage of the cost of coverage. Public employees could see current health costs at least doubled, or tripled in some cases.

Public employees currently paying 1.5 percent of their health care premium cost will pay 3 percent for those earning under $25,000, and up to 35 percent of their health care premiums for those making up to $100,000, on a sliding scale that is based on employee compensation.  The rates will gradually increase based on an employee’s compensation, at intervals of $5,000. 

The increase to health costs will not affect current retirees, and active employees with at least 20 years of service will pay the increased contributions while still active, but will not be affected upon their retirement.

Mitzak said this will be another issue, and may force some into earlier retirement.

“I would say that this might make people retire because anyone with 20 years or more won’t have to contribute to health care in their retirements,” he said. “Why would you stay on the force now because you’re going to lose money when you could retire now and not lose it?”

Within the next five years, Mitzak said, there will be a good percentage of the force with 20 or more years working.

But Bridgewater Township Mayor Patricia Flannery had a different take on the legislation, and said she supports it as a step in getting the state back on the right track.

“Benefits have been too generous historically, and not consistent with what is going on in private entities,” she said. “That needed to be changed.”

“Private industry has taken a real course correction with people retiring later,” she added. “That same course correction has now been applied to public employees.”

And, Flannery said, she believes there will be more options available to public workers now.

“I think there will be more options presented now, and while employees will have to contribute more, they will have options for what plan they want rather than being forced on one,” she said. “That mimics private industry with more responsibility for choosing doctors, procedures and how much it will cost.”

The bill currently contains two options for public workers, one where public employees can buy health insurance that covers out-of-state treatment, or a cheaper option that restricts employees to New Jersey hospitals, unless their case can only be handled by an out-of-state doctor.

The overall impact of the increased pension and health care contributions is estimated to range from $1,142 for a public employee making $25,000 per year, to $6,058 for an employee earning $65,000, according to the Communications Workers of America (CWA).

Bridgewater teacher, and president of the , Steve Beatty said they are disappointed by the outcome of the votes on this bill.

“It is unfortunate so many supposed Democrats have voted for this under the guise of hard choices, and they have made a decision for the destruction of the middle class,” he said.

Beatty said this new legislation will make things more difficult in terms of bargaining because that will be essentially eliminated at the local level.

“It’s horrific, and this is just the beginning of what’s coming next for the assault on public employees in the guise of reform,” he said. “It’s really an agenda meant to enrich the governor’s friends.”

Mitzak said the union is currently in the middle of a against this bill because members believe it is unconstitutional.

At this point, Mitzak said, he is trying to bring Senator Christopher “Kip” Bateman in to the police department to get a better understanding of the full bill. But, he said, he has yet to hear back.

“And I have urged all the members to call their legislators against this,” he said.

Flannery said that, while she supports the legislation, she does also believe that much of the blame for the state’s current situation has to fall on the politicians themselves.

“It is not the fault of the public employees and unions that we got in this mess,” she said. “Politicians did not pay payments as they were due each year.”

“What I would like to see is the conversation change a little now, and probably there is more reform needed,” she added. “But we have to realize we are all in this boat together, and the politicians deserve a good bit of the mess for having made these agreements in the past. We have to put aside the blaming, we are on a good path.”

Mitzak said he sees this as just a temporary fix that will hurt some of the state’s taxpayers.

“They keep saying they are doing this for the benefit of the taxpayers,” he said. “Number one, we’re taxpayers too. If this will help property taxes go down, I’m all for it, but ask me again in a few years, and who are you going to blame then?”

“Will there be other abuses somewhere else?” he asked.