DN Editorial: There hasn't been enough 'reform' of city workers' pay & benefits

Posted: September 28, 2012

MAYOR NUTTER announced a "compensation and benefits reform package" this week that will affect 5,500 nonunion city workers, and smart money says the annoucement was designed to put pressure on the municipal unions DC 33 and 47 to fall in line with similar changes to benefits and pensions.

The announcement was unusual in that union terms usually dictate whatever compensation and benefits changes that nonrepresented employees of the city get. But those municipal contracts have been unresolved for three years now, and Nutter says that it's not fair for nonunion employees to forgo raises and other pay boosts just because labor agreements haven't been reached.

So those 5,500 workers will get 2.5 percent raises and other boosts, but will pay more to their pension and health-care accounts. Also, there will be changes in overtime rules, elimination of double time, new furlough rules and a proposed new hybrid pension plan for new employees, subject to City Council approval.

Nutter was critical of union leaders for not accepting the pension and health-care reforms that have been proposed, and was sympathetic to the nonrepresented employees working without a raise since 2007.

The two municipal unions blasted the changes as a pay cut, unfair to hardworking employees who have gone without a pay hike for four years, and say they will fight even harder against the city's proposals.

As unusual as Nutter's pre-emptive move was, the resulting grandstanding on both sides had the familiar earmarks of political Kabuki theater. Caught up in their performances, though, both sides seem to have forgotten one thing: the audience in the cheap seats. That would be the rest of us, including:

* The 12 percent of the city's population without jobs.

* The 30 percent of the population who live in poverty.

* The workers who have lived in the age of the Great Recession with layoffs, cutbacks, downsizing and job losses, to say nothing of pay freezes, pay cuts and benefits cuts.

* The city's taxpayers, who have shouldered increasing burdens, through multiple tax hikes, to help pay for the staggering costs of health benefits and pensions as well as unfunded pension obligations for city workers. According to figures from Pennsylvania Intergovernmental Cooperation Authority (PICA), the city's employee-benefit costs increased about 12.7 percent a year from fiscal year 2003 through fiscal year 2008, and 16.5 percent in fiscal year 2011. Today, nearly 70 cents of every tax dollar goes toward employee wages and benefits.

As PICA points out, the pension liability is the "Achilles heel" of the city budget. Total pension payments are now 17.6 percent of total expenditures.

So while we're glad that the changes implemented by the mayor are designed to reduce this burden, it's still not enough.

Not by a long shot.

Before the players ask the rest of us to applaud their performances, we'd like to remind them: We have already paid a steep price for the ticket to your theater.

We can't leave our seats. But we may start throwing things.

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