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 the total dollar figure.   The possible hours per year less the days off for vacation, sick, personal, holiday, training, celebrations, etc. provides the productive hours.   Divide the dollar total by the productive hours to get the hourly rate of any worker.   If you use a handyman, you know he charges by the hour plus materials.

        The average compensation package by Lane County 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 workers average 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.   Making this worse is that Lane County adopted the "guaranteed benefits" retirement program under PERS which Siuslaw County can stay out of enjoying a huge saving in labor cost.

        What is not factored in the hourly costs is the backfilling required of the tax payers when a Lane County worker's PERS pension does not deliver the guaranteed 8% return.   In addition, the worker receives what he would pay in Oregon income tax for that PERS check even if the retiree no longer lives in Oregon.   Most public jobs in Oregon are covered by labor unions which adds additional expenses compared to what the private sector can afford.   PERS has been revised several times in recent years to move into a more appropriate pension system; however, the burden of past contracts will continue for another forty years.

        PERS is a contract that can only be reduced voluntarily or under bankruptcy proceedings.   County services can only be funded AFTER all labor and PERS costs are paid making services effectively only possible if any funds remain.   Most of the recent tax and fee increases have been to backfill the PERS program so it can continue providing guaranteed benefits; little if any go for returning lost County services.   To give some insight into how just PERS is causing the shift of funds 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.   {Text is provided below the link line.}<\i>

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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