County Labor Costs

        The major cost of public agencies is labor of up to 80%.   To compare the actual costs of public workers to private, it is necessary to reduce it down to the cost per productive hour.   The salary/wage, benefits, PERS, training, personal/legal office overhead, etc. provides an cost figure.   The possible hours per year less the paid days off for vacation, sick, personal, holiday, training, celebrations, etc. provides the productive hours.   If you use a handyman, you know he charges "time" and materials to cover all his costs and materials for a job.   A county worker's cost/hour is the ultimate figure needed.

        The average compensation package is 66% times the salary figure.   The 2005 effort using Lane County provided data showed back then the average worker received $83K annually for $53/hour for the nine months they work.   (Typically get three months off in vacation, personal time, sick leave, holidays, etc.)   A custodian's pay was $60K with the benefits alone being $25K plus three months off time per year.   Do private businesses pay their janitors at this rate?   Could the county contract this service out for less?   A sheriff deputy functioning as a jailer today confirmed by Sheriff Turner is $140,000 in salary and compensation while enjoying lavish paid days off.   The problem is Lane County worked itself into this devastation by entering the PERS program which Siuslaw County can stay out of at huge labor savings!

        What is not factored in the hourly costs is the backfilling required of the tax payers when his PERS pension does not deliver the guaranteed 8% return.   Also not included is that with PERS, the Oregon income taxes due on a PERS pension check is added even if the person no longer lives in Oregon.   PERS is a contract that can only be negated voluntarily or under bankruptcy proceedings while services to the county residents is optional out of any funds left over after labor.   PERS has been revised several times in recent years to move into a more appropriate pension system; however, the burden of past contracts will go well into the middle of this century.

        To give some insight into how just PERS is causing the shift of fund from providing services to providing for salaries, benefits, and pensions; here is what was published by "The Healthy Communities Initiative" regarding the Eugene School PERS situation: Bigger PERS Payments Means Fewer Teachers (22 January 2013)

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Could Bigger PERS Payments Mean Fewer Teachers In Lane County?

        "Recently a highly placed official with Eugene 4J Public Schools spoke off the record with a member of Lane Solutions’ editorial staff.   He revealed to us the cold, hard facts about the coming mandated increase in Public Employees’ Retirement System (PERS) payments and their effects on Eugene students.

        "During the coming biennium, mandated PERS payments by Eugene 4J will increase by 6.55%, or about $4,900,000 per year.   By State law this, plus current PERS payments, must be made first.   In other words, before 4J hires one more teacher, buys one new textbook, or makes one new computer available to our children, it must pay this additional amount into employee retirement.

        "So, what will this increase cost our children?   Plenty.   According to this official, a teacher costs 4J about $95,000 per year.   Each one percent increase in PERS payments costs about $750,000 per year.   So every one percent increase in PERS payments means that our children lose almost eight teachers!

        "The cost of a 6.55% PERS increase?   The possible loss of nearly 52 teachers!   The result – more kids per class and less education.

        "Should the PERS increase be covered by teacher layoffs, who will lose his or her job?   Thanks to union rules seniority trumps teaching ability, performance and results.   So the last hired become the first fired.   This means that less expensive teachers are the first to go.   A first year teacher costs about $32,000 less than a teacher with 20 years seniority, or about $63,000 per year.   If all the layoffs come from this group, 4J will have to lay off 78 teachers!

        "In previous issues of Lane Solutions readers have learned how PERS rules and disputes concerning them are both made and adjudicated by the very State officials who profit from their own decisions, thus stacking the deck against taxpayers.

        "One result of this stacked deck is that PERS retirees are compensated for Oregon income taxes they must pay on their PERS income – even if they live elsewhere and therefore don’t pay Oregon income taxes.   That’s right – a PERS retiree living in Delaware gets money from Oregon taxpayers for the Oregon income taxes he or she doesn’t pay!

        "The 4J official who revealed for our readers the true cost of PERS increases concluded the interview with some even more disturbing news: The increase in health insurance premiums is even larger than the PERS increase, and so may result in even more teacher layoffs.   But more about that in a future issue of Lane Solutions."

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