Union County freeholders voted in February to give “free” lifetime health benefits to the families of 650 union county government workers. This was in exchange for 3 years of 0% raises. When the freeholders were questioned on the costs of this they noted that they voted without having done a study to see if there was a savings but they felt there surely would be.
The studies are now out, 3 months late, and guess what? There is no savings. But the damage is already done to the taxpayers to the tune of approximately $100 million tax impact over 25 years.
I reviewed the study and this is what I found. First in my opinion, the study by O’Sullivan Associates can be loosely described as fraudulent and misleading. Many numbers and assumptions of theirs may be questioned but here is my highlight. The one important page for understanding what travesty the freeholders committed is page 13 Table B2. The 0% raises they crowed about saved the county $3 million over 3 years. However, from column 6 the “free” lifetime health benefits will cost the taxpayers $102 million by year 2036. The deceit in this report is in column 2, where O’Sullivan allegedly shows the 0% raises for 3 years offsets the $102 million tax impact. I say deceit because of 3 issues: 1) the savings is only gained in 3 years not over 25. It is only a one time benefit. The balance of this column O’Sullivan is identifying as “intangible” accrued interest savings which they use to try to offset the real “tangible” costs of their free health benefits. 2) After 3 years, the workers start getting raises again so there is no further savings. 3) If O’Sullivan wants to identify intangibles in his cost tables he should also list the lost investments and dividends of the residents when the $102 million is removed from their collective pockets as taxes instead of the residents putting it toward their retirement. That would fully offset any contrived interest “savings” on payroll listed in column 2.
Bottom line, $3 million cost us $100 million. In fact that $3 million savings is used up in 4 years. But I have been attending freeholder meetings for 8 years and I found there is nobody intelligent on the board to understand this. Hence the unanimous vote for it without a study. This is the result of having an inexperienced county manager whose only claim to fame is that he is Senator Lesniak’s nephew; and the freeholders are only selected by being good political soldiers to their political bosses, not that anyone is required to have business and financial acumen. So instead we hear the freeholders talk about draining bird baths, planting trees and calling boards of education terrorist organizations. The only freeholder that had financial experience was Freeholder Mapp, but he started to ask questions a few years ago and voted no on financial matters so he was not selected by the political boss to run again for re-election.
Director of Finance Caroselli, who retired just this May, now receives these “free” lifetime health benefits. He stood at the microphone one meeting and supported the freeholders’ action and said “they were ahead of the curve” on this. The Finance department directorship is now replaced by someone who only has 1 ½ years financial experience, so she has no idea what mess was left her with the health impacts. The system is in shambles, the taxpayers are screwed.
In reality, you and I, dear readers are the ones to blame for allowing this. It is time to stand up and stop this corrupted system that is hurting all of us. A suggestion would be to go to your council meetings and tell the governing body you are outraged and to stand up and fight for you against the county. There needs to be fair representation at the county government and one way is for districting of the county instead of just at-large representation. If you are an elected official reading this, we suggest you form a coalition with the other towns to start talks with the county to change what is happening. 14 of the 21 towns do not vote for the incumbent freeholders so you do have solidarity. Vote to hold back the county portion of your taxes if need be. Heroic actions need to be taken. The county acts like they own us all, but it needn’t be that way.