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Municipal Budget Up With Raised Health Insurance Costs

Budget process kicks off with discussion of appropriations.

With the beginning of a new year also comes the beginning of a new budget season.

Montville Township officials have already put hours of work into developing the 2013 municipal budget. Budget appropriation estimates were discussed at Tuesday's township committee meeting, with general appropriations anticipated to increase in 2013 by about $405,372 over last year's budget, representing a 1.42 percent increase.

Township Administrator Victor Canning said Thursday the figures presented to the township committee were preliminary and that there is still much work to be done in determining the municipal budget and how it will impact taxpayers.

"By state statute, we're supposed to, within the first week of January, convey a budget message, as admininstrators, to our elected officials that we've officially started the budget process," he said.

Included in the message, Canning was pleased to say that the township was able to decrease salaries and wages by $101,519 this year. He said this was done through attrition, including not hiring a new township engineer after Tony Barile retired, reducing a captain's position in the Montville Township Police Department as per a recommendation in the police study conducted this year and by privatizing services.

While the township was able to reduce costs in the area of salaries, Canning said costs beyond the township's control are the cause of the increase in general appropriations. This includes a 10 percent increase in health insurance premiums, terminal leave payouts owed to employees who retired in 2012 (a $269,495 increase this year) and the settlement of several tax appeals amounting to more than $800,000.

"Those three things alone are recipes for disaster," Canning said.

Canning said the township was able to save more money, however, by settling tax appeals than what could have been spent if the municipality entered into litigation.

"We probably would have risked way more than that," he said.

Canning said he is unsure at this time whether a change in technology at the Parsippany-Troy Hills Wastewater Treatment Plant that appears to have shifted the cost burden on Montville more than anticipated will have an impact on the 2013 budget and what the impact may be.

While the general appopriations shed light on some of the areas the township will spend money in the upcoming year, Canning cautioned that the figures offer only a glimpse of what's to come in the budget process.

The township is planning to introduce its municipal budget March 15, with plans to adopt a budget by April 26. However, Canning also said the budget adoption timeline is dependent on the state Library Board's returning of surplus money to the township.

Maxim Sapozhnikov January 11, 2013 at 01:53 PM
The proper solution is, of course, to increase premiums, copays, and deductibles for all municipal workers to keep healthcare expenditures to the same level. At least half of them are presumed to have voted for Obama, so we should let them fully enjoy the results rather than bankrolling their political nearsightedness (or worse, stupidity).
Mrs. Smith January 11, 2013 at 02:33 PM
It's a double whammy for the private citizen. Our health insurance premiums go up too and now we have to experience a property tax increase to pay for yours. Shop around for a new policy, increase co-pays or deductibles, or better yet, increase employee contributions towards the insurance. Don't pass it on to the citizens.
Les Le Gear January 11, 2013 at 04:15 PM
My 2012 tax went up 12%. Can't wait for 2013.
Comfortably Numb January 12, 2013 at 12:13 AM
Mr Max, I totally appreciate your resolution, I find it humorous, but Im not totally convinced that there are that many Montville municipal workers that voted for Obama, (maybe I give give them more credit then they deserve). On a secondary issue, Im not convinced that the ridiculous Obama Healthcare bill is totally responsible for the increase in commercial healthcare costs. There's no question that Obamacare will increase federal and state costs with the increase in uncompensated care and Medicaid expansion but I cant say that his moronic legislature is responsible for the increase in commercial healthcare costs, I think there are other driving forces increasing healthcare costs. (Unfortunately 4 years later Obama himself isnt sure about the affects) If Im wrong about all of that then I totally agree..........Major copays and deductibles for anybody that voted for Big Gov...just because
melikric January 12, 2013 at 02:33 AM
Are the township employees here to serve the taxpayers, or are the taxpayers in Montville supposed to serve the township workers?
Tina B January 12, 2013 at 05:59 AM
Comfortably Numb probably doesn't own his own business which provides health insurance to understand how policies are being rated on Obamacare requirements. I've seen the paperwork.
Dan Grant January 12, 2013 at 03:52 PM
Nowhere in the article does it give a figure for the increase in healthcare costs and nowhere is there a perspective on the effect of that on overall tax rate. People generally have no recollection of the cost increases of healthcare prior to the Affordable Healthcare Act. Long before that was even though of we were getting increases of 10-15-20 percent from NJ Healthcare Benefits, which was supposed to be a co-op type of health insurance which saved Towns money. It didn't. plus we had some flakey rules like if husband and wife both worked for government they both had to have indivual plans. Elected officials had to have the opportunity to get it and we were subject to constant increases. It makes a nice but largely meaningless target for people. Montville Township collects over $90 million in taxes for all purposes. Municipal Government gets about 20 percent of that. You could eliminate the entire Public Works and Police Departments and still not see a significant decrease in your taxes so lets get real for a change and stop attacking the people who provide the services that we need. Township Employees do serve the Tax Payers but it is a contract like any other and they deserve a living wage and benefits as a part of that contract. There are other ways to reduce the burden on property tax payers that would have a real effect but it lies in the funding of our schools not in treating our public employees badly.
jf January 12, 2013 at 05:34 PM
If the cost of healthcare for town employees is going up then the raise in their contributions should be commensurate. I hope at least that is happening. It may not be ALL of the problem but it could be part of it and each step - no matter how small - will help move us toward a more level playing field when we look at the cumulative effect of these various savings/cutbacks. I guess that year the town saved $1,000,000 in healthcare costs was just a fluke. Whatever happened with that mil? The residents voted down the field. I'm sure there are contracts in place that we are obligated to uphold but where we can find savings by switching healthcare providers or any other service provider we should be looking into it. Like all of us who are trying to live on a budget the town should be trying to find ways to streamline the budget. I don't have the confidence that this is something they are doing. I could be wrong but the more I read the sicker I get.
Maxim Sapozhnikov January 12, 2013 at 07:44 PM
JF, the million you talk about appeared thanks to Chris Christie who forced educator unions to shop for the cheapest insurance, rather than using one owned by NJEA. The savings was not a "one-time gain", since the reduction became permanent. The idea behind taxpayers voting down the turf project was obviously to decrease the baseline levy, but our unionized "educators" would not allow that - they just stuffed the budget with a bunch of pork projects from their wishlist. To pass the budget, they claimed (over my objections) that the budget increased 0.83%, which was a blatant, insolent, and possibly criminal lie; the actual BoE budget increase was 4.7%, masked by the "free million" and increased state aid. All numbers are publicly available so feel free to check my statement.
jf January 12, 2013 at 09:17 PM
Maxim - I'm not as well versed with these specifics but I am curious - at what point do we say that the BoE has crossed the line and to whose attention do we bring this unfortunate situation?
Dan Grant January 12, 2013 at 10:14 PM
jf, you can't take anything Max says at face value. Nothing passes through the filter of his innate hate of Unions, Collective Bargaining, Democrats ect. They are two different issues and two different budgets. The School Board gets about 65 percent of your property taxes and the Township takes about 20 percent. The County takes the lions share of the rest along with the Library,Fire districts and Open-space tax. The Township Budget revenue also contains money that is not taxes like State Aid, Fines, Fees, a taking of water and sewer rate payers money ect. Outside of State aid the School Board receives no extra source except the fees parents pay for certain activities. On a percentage basis that isn't a lot of money. What Max doesn't mention is that the first year of Christie he reduced state aid to Montville Township by about $3 million dollars and while we have recieved state aid in years since it still isn't close to what it was before he took office. Unless there was a corresponding cut of $3 million that the property tax payers make up the difference. The Real problem with property taxes is that property tax payers foot 93-96 percent of the States Obligation for fund the education of children and until this is addressed witha broad based state tax the rest is just political posturing. Oh and what Max said about "Unionized Educators" well they don't set the budget. The School Board does.
jf January 13, 2013 at 01:14 PM
Dan - so the current state of affairs regarding the town budget including the 65% (which I actually knew based on my tax bill) for the schools is acceptable and the only answer is to TAX the taxpayers MORE???? That extra mil brought the $3 million shortfall to $2 million. What was the school budget for that year and as a PERCENTAGE of that budget how much does that $2 million represent? Not much if I recall correctly. I don't have the budget numbers in front of me. Why not make a cutback or two??? As individuals we do this so as a township we need to do this too. It can't be that EVERY budget item goes up EVERY year. How about trying to hold the budget flat or making a commitment to cut the budget by 2% like we do in corporate. How long can the residents tolerate inept handling of tax revenues and the games people play in this town. At some point tax payers will ask themselves if this makes sense and realize it doesn't and just move. I know people who are making this assessment right now. We need a more fiscally responsible township that is able to make the types of decisions we as individuals have been making in these tough economic times.
Dan Grant January 13, 2013 at 02:16 PM
People always try to compare Government and education to business. Business gets to do alot of things that can't be done in either. Do you really want a "Walmart" education for the children of Montville Township? You can't outsource teachers to a cheap labor country. We can't bring in cheap improperly made products for town or school use for cheap prices. I am not saying you can't cut costs but I am saying the price of cutting costs can be high in property values and the safety of the Township. I have major problems understanding why the retirement of 5 top officers and the highering of 4 new officers doesn't reult in a larger savings than is listed in the article. As far as insurance one year I pushed for self insurance and initially we saved a good deal of money. We had an umbrella policy to cover a major cost. That should be looked at again. The real point however is that under the NJ State Constitution the obligation to educate the children of the State and that has fallen to property tax payers alone. That in itself is wrong and the Legislture won't do anything about it.
jf January 13, 2013 at 02:47 PM
A Walmart education? I think that's going just a bit too far. And I'm tired of people who think the private sector is SOOO different than the public sector that the same rules for budgeting can NEVER be applied. I'm not a corporation and I've been able to make cuts in my personal budget. So there is no fat in the budget-every expenditure in the township budget is a valid one and every line of the budget has been methodically crafted? I am not suggesting reckless cutbacks for the township or the schools - that would be dumb, but calculated, thoughtful cutbacks DO make sense! What are the drivers of the cost of education? There are more factors than just faculty salaries. I'm just curious- what kind of increases are they getting on an annual basis as people continue to lose jobs, endure fractional salary increases, or just plain can't keep up with inflation ( and please no one blog about how inflation is flat - CPI is a lousy indicator - always has been and always will). The only people that will be left to pay taxes are the teachers and the town employees. Wouldn't that be ironic!
Gary Lewis January 15, 2013 at 01:51 PM
To fill in a missing piece of this discussion, municipal and state employees in NJ are in fact contributing much more to their pension costs and health care premiums, and will continue to see increases in those contributions in the years ahead thanks to the sweeping legislation signed by Governor Christie 2 years ago. Also, their health insurance contributions are now a percentage of the premium, which will help offset future cost increases. The cost sharing changes are fair, but frankly the criticisms of public employees are not. Many have seen their net incomes drop as a result of these new cost sharing and pension increases. So please bear in mind that, as easy as it is to bash public sector professionals, they, too, are in fact sharing in the pain and are being asked to do more with less resources and, in turn, deserve some credit for that. Gary Lewis
jf January 16, 2013 at 03:45 AM
So what are they currently contributing to their health care premiums on a percentage basis? It's long overdue whatever it is and it's probably not much. No one in the private sector even gets sick days let alone the opportunity to bank them and take the cash upon retirement.And as far as vacation time - if you don't use it you lose it. I think a lot of people are pleased with Governor Christi's efforts to level the playing field. Oh please someone else weigh in on this. Public employees have had it too good for too long and now they expect us to what - feel sorry for them because they too have to suffer with the rest of us. Please!!!!!!!!!!!!
Gary Lewis January 16, 2013 at 05:15 PM
The contribution is a percentage of the premium that goes up along salary scale, i.e. higher-paid workers pay a higher percentage of their premium, maxing out at I believe 35%, plus an additional 7 percent of their salary for pension costs. And please get up to speed....Governor Christie capped the practice of banking sick and vacation days 2 years ago.....that's old news. Also, I have not heard public sector professionals asking anyone to feel sorry for them......union leaders, perhaps, but not the average town worker. They pay property taxes as well. I agree with you the public sector had overly generous benefits throughout the 80's and 90's and, fortunately, an end has been put to it as fiscal realities kicked in. Kicking public sector employees, though, is crude and unwarranted. I watched these same folks firsthand leave their homes and families without power durting Sandy and work tirelessly to open roadways and clear hazards for the protection of Montville. We're all in this economic mess together. Gary Lewis
Dan Grant January 16, 2013 at 10:47 PM
Public Employee's make lifetime choices to put a cap on their income in exchange for public service. They leave any opportunity to make it into the top of the ecconomic food chain by virture of their choice of occupation and Thank God they do. Society needs the work they do. We need public works employees, we need Teachers, FireFighters, EMTs and Police and they are not in it to get rich but they do need a reasonable wage in exchange for the choice they make. You always hear about the excessive, usually top public management people with multiple pensions but the vast majority of public employees work hard and the loss of up to $6000 per year out of their checks under Christie hurt them and in fact hurt NJ's ecconomy. They spend their money and they usually spend it locally. Private sector workers have given up on their rights mostly out of a fear of being replaced. There was a time that paid health insurance was a standard benefit of private full time employment. They lost it. That doesn't mean that Public employees should be attacked and bullied because their employer happens to be the tax payer.
jf January 17, 2013 at 02:15 PM
Gary - I am up to speed thank you - I wasn't referring to the Christi era. I hear plenty of family and friends in the public sector complain and moan about what Christi has done and what other states are trying to do as well and a collective sigh of relief from taxpayers. I am not denying anyone a fair wage - it is easy enough to find public sector employees' salaries on the internet if people think I'm being unfair. But when the excesses begin to weigh on the people that shoulder them that's unfair too. Private sector employees have no choice but to give up - not out of fear of being replaced - but because they don't have unions to support them. I always said if anyone needs a union it's corporate employees. I know kids out of college that are making much less than some of the entry level public employees without education. Additionally these people get overtime and other perks the entry level positions don't offer in the private sector.
jf January 17, 2013 at 02:26 PM
GARY: Please feel free to get more specific as to what percentage MOST employees are paying versus this sliding scale. (The contribution is a percentage of the premium that goes up along salary scale, i.e. higher-paid workers pay a higher percentage of their premium, maxing out at I believe 35%, plus an additional 7 percent of their salary for pension costs.) Private sector employees have been doing this for years with no sliding scale and most without a pension, just 401k's. I worked for the biggest company in the world - and no it’s Walmart - and other Fortune 200 companies and all of them require employees to make a hefty contribution toward their premiums. All in all, I'm not looking to complain about problems - I'm looking for solutions - town - wide solutions not just salaries. I will reiterate my earlier remarks - we need a more fiscally responsible township with better budgeting skills so that everyone can benefit. This town is starting to feel like a carbon copy of our federal government. No cuts just taxes! And if that isn't going to work at the federal level it's certainly not going to work on the local level especially when you take into the account the cumulative effect of both an increase in federal taxes AND real estate taxes on spending and the ability of this economy to recover.
Gary Lewis January 17, 2013 at 03:52 PM
jf: Can't tell you with any certainty what the mean and median contributions are, only that the percentage of the premium goes from 6% for the lowest-salaried employees, up to 35% for the highest. The pension contributions are increasing incrementally annually to a max of 7.5% in a couple years, versus a much lower employer contribution. There are still many private-sector employers who offer health care at discounted cost-share rates....that is market driven. Public employees should pay their fair share and, fortunately, now do. A $6,500 annual employee contribution toward health care is pretty substantial - granted that's the high end of the spectrum. On the pension versus 401k point, I would generally agree, and in a good number of cases (not sure if it's a majority or not so I want to be careful), new public employees are in 401k defined contribution, not pension systems. Thanks again to Governor Christie...this guy deserves more credit than he gets sometimes. That being said, a $50,000-year public worker who was lucky enough to be enrolled in a defined benefit pension plan who works for the government for 25 years can expect a whopping $1,750/month in pension benefits; and in many cases, local employee retirees still have to pay their full health care costs in retirement, unlike police, fire and teachers. So it's really not as grand as it might seem on its face. P.S. Not looking to pick a fight with you or anyone, just to get some correct info out there! Regards, Gary

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