The new General Accounting Standards Board (GASB) rules passed by Congress in 2004 in tandem with rising health care costs threaten “the ability of local governments to continue to provide essential services,” according to the Washington-based National League of Cities. Many local governments looking for ways to cut costs are revising benefits packages for new employees as well as reducing previously promised benefits packages for older employees. American City & County asked readers of its weekly e-mail newsletter if they think local government should be allowed to decrease employee benefits once they have been promised. Below are some of the responses:
“Reducing benefits can be a real morale buster for many employees, especially those in the lower-paying positions. However, government may not have a choice when it can no longer afford to pay for those benefits.”
— Dave O'Connor, Engineer, Water and Wastewater Engineering Division, Broward County, Fla.
“Health care is a national problem that we employees should not bear the burden of alone. I have worked for Ontario County, New York since 1978. The reason I am not retiring is the exorbitant health care cost I would have to pick up immediately, and which is only certain to rise much faster than a pension ever will.”
— Marsha Sutphin, Probation Supervisor, Ontario County, N.Y.
“When municipalities reduce employee benefits, this is actually a wage reduction. Increased co-pays come out of the employee's wage. Reduced benefits often will result in reduced medical, dental or vision care either because the employee cannot or is unwilling to pay increased deductibles.”
— Kenneth Venables, Fire Chief, Palatka, Fla.
“Beginning July 1, 2004, Hall County began deducting 5 percent of the insurance costs from our pay, and this July it will be 10 percent. This is being done to the employees who were hired with full insurance benefits paid. The employees are now asking, can they take away our benefits once they have given them to us?County employees are at the mercy of the tax collections.”
— Doris Mason, Treasurer, Hall County, Neb.
