Report Touts Pay Reforms

Local New Jersey governments could save more than $39 million through reforms of compensation and benefit packages to municipal employees, according to a report compiled by the State Commission of Investigation.

The analysis, which the SCI released last week, indicates that local governments throughout the state spend millions on wasteful salary and benefit practices, including allowing employees to cash in unused accumulated sick, vacation, and other leave at retirement. Such practices generate six-figure, lump-sum payouts in certain municipalities.

In addition, some employees enter into a “terminal leave” prior to retirement to use up sick time and other leave at full salary and benefits, with the local governments unable to fill the position, in some cases, for up to a year. Many municipal employees are not required to make payments toward their health insurance benefits, unlike state employees who give 1.5% of their yearly salaries toward health insurance costs, according to the SCI report.

“The commission has identified more than $39 million worth of excessive cash-benefit payouts to public employees in just a small fraction of the state’s local governmental entities,” the report said. “Extrapolated statewide, action to curtail such extravagance would result in enormous savings — especially given the fact that, in addition to state aid, nearly $40 billion is spent by local taxpayers every year to fund municipal governments, schools districts and local public authorities in New Jersey.”

Some examples of waste include ­Camden, where 20 local employees from 2004 through 2008 received a combined $2.3 million of cash payouts at retirement. During that same five-year period, 160 Atlantic City police officers and firefighters received more than $13.7 million for accrued unused sick leave on top of their pension benefits, at retirement, according to the report.

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