This summer the New Jersey Office of the Comptroller reported on a billion-dollar liability that sits on the backs of state taxpayers. It is a liability few taxpayers realized was part of their burden. In Cape May County our share of that burden amounts to $26.7 million and climbing.
Here is how it works. Many categories of municipal and county employees are allowed to bank unused sick leave, vacation time and even compensatory hours. They bank them for an eventual payout at retirement, or even, according to the Comptroller, at other times that violate state laws.
An examination of the financial records of 60 of the state’s 564 municipalities showed that 95% were offering leave payouts that violated state regulations. There were no such violation found in the practices of Upper Township, the only Cape May County municipality reviewed.
Even where state law is not violated, the practice of accumulated leave payouts is a hidden burden on the taxpayers and on local government finances the taxpayers ultimately support.
In February the Department of Community Affairs looked at all municipalities and found that 486 were carrying accrued sick time and other paid leave on their books as liabilities. A Herald review of the 16 municipalities in the county showed 13 carried leave liabilities on their books, the exceptions being Stone Harbor, Cape May Point and Woodbine. The total of those liabilities in 2021 was $19.6 million. The county government itself also allows accumulated leave a current liability on its books of $7.1 million. If you think the combined $26.7 million is all of it, you’re wrong.
County school districts also offer the payout of unused leave. A quick look at just 10 management level employees in one district for 2021 showed over a quarter of a million dollars in leave liability, termed on school budgets “post-employment benefit amount.”
Certainly, we appreciate the work of municipal, county and school district employees. We reward that service with appropriate salaries, strong benefit packages and state retirement opportunities. It is time for this practice of banking unused hours for a post-employment payout to stop.
The vast majority of taxpayers asked to shoulder the burden of accumulated leave payout had no such advantage in their own careers. The standard practice in the private sector is use it or lose it.
What we see at work here is the power of the unions to gain ever more benefits and the willingness of the local government bodies to capitulate to union demands. Among the municipalities with the largest leave liabilities, the Police Benevolent Association (PBA) members account for the greatest proportion of accumulated leave, with some officers receiving tens of thousands in a leave payout in addition to all normal retirement benefits.
The dollar value for compensated absences for county workers who happen to be members of the American Federation of State, County and Municipal Employees (AFSCME) is well over $3 million on the county books.
Checking municipal annual audits will not provide any information on whether or not the municipality is abiding by all state regulations regarding this practice of unused leave payout. At the state level we are told the manpower does not exist to track down violations, nor does it appear that the state has the authority to do anything about them.
There has been no word to suggest that the municipalities the Comptroller found violating regulations will suffer significant adverse actions as a result. The municipalities caught in the review of 60 towns are directed to develop a corrective action plan. The 500 plus municipalities that were not reviewed skate. The Comptroller included no review of county practices or those of school districts.
It is a situation that cries for corrective action from the legislature with the full support of the Governor. The likely outcome is no action at all unless the taxpayers demand it.
So where are we?
We have an employment practice that should not exist. Payout for unused leave is an added and unnecessary burden on taxpayers who already are saddled with the highest property taxes in the country.
We have the imposition of some limits on this practice by the state that are routinely ignored with no consequence. The Comptroller points to 95% of the 60 municipalities studied being in violation of what state regulations there are.
We have municipal, county and school board officials who cut services or raise taxes while arguing the case of financial hardship of one form or another, but who fail to deal with this blatant looting of the public coffers.
This must stop and only the voters can ensure that it does. Bring this issue to your governing body at a public meeting and demand an explanation for why you should pay added taxes to support a practice that has no place in local government.
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From the Bible: God so loved the world that he gave his only Son, that whoever believes in him shall not perish but have eternal life.God did not send him to condemn the world, but to save it. But whoever does not believe in him is condemned for eternity. – From John Chapter 3
