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Menino sitting on cartons of cash?
By adamg on Thu, 05/13/2010 - 8:08am
David Bernstein attempts to look into the municipal vaults; gets glimmers of millions just sitting there.
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Comments
The one thing I don't get
The one thing I don't get about money in reserve is even if they have it, and spend it this year, what about next year, once reserve funds are gone...how do things that we've kept get paid for?
There's that, and there may
There's that, and there may also be legal restrictions. Sometimes holding cash is prudent, but sometimes there are strings attached to the cash. The city may collect revenue earmarked for future activities (typically the case for federal funding). If so, they can't just spend it today on some other activity.
Three points
1) Does the city have the money - YES
2) Should the teachers have fought the pay freeze - YES they had an existing contract (imagine what they'd ask for and possibly gotten in arbitration if they agreed to the pay freeze - no knock on teachers - but the union would have asked for the moon - and maybe gotten it)
3) Should the firefighters get this raise - NO - it's outrageous and as pointed out above -those are mostly one time moneys - good for paying down debt, capital fixes etc - but terrible to start using that for operating expenses - that never ends well.
The big question I have is the following -
Over the past 10 years we've seen about 25% inflation, the city's budget is up 50%, we've increased costs per employee by about 65% (that ain't all pensions and healthcare!) while slashing services and residential property taxes are up 100%.
How is it mathematically possible for the city to still claim it is broke? Where is all the money going? Bernie Madoff?
Why?
Why shouldn't the firefighters get the raise? What's outrageous about it?
T
You're kidding right
with inflation running about 9% over that time - why should they get more than double the rate of inflation?
Most private sector workers got zero and are lucky to have jobs - you can't keep increasing taxes and public wages more than the private sector - the system eventually collapses as it is doing now (see Greece for end-game example).
also - these raises will ultimately feed into the pension system - 20% increase in pensions plus say even 10-15% increase in investment value equals a bankrupt pension system.
and nobody should get paid for getting drug tested at work if that's a condition of employment (as it should be for any public safety job) - that's ridiculous.
I don't know if it's justified in this case
But you could easily see getting more than double inflation if comparable private sector jobs were getting paid more (otherwise, who would ever want to do the public sector job...see also "SEC investigator vs. Goldman Sachs analyst" jobs). For example, the Army has probably gotten something on the order of a 19% increase over the past 10 years at a rate of 1-2% above inflation each year slowly. Then again, 10 years ago the Army was paying vastly under market for its hires, so it's been a slow triumph to get them back up to grade with the rest of the comparable private sector jobs. The same may be true of Boston Fire, but I have no idea. If it is, then this could be an increase just to get them to par and something we *should* have been budgeting for all along (but refused/lucked out on until now).
So the firefighters should
So the firefighters should bear the sole brunt of this recession? Why not approve this contract and negotiate with all the unions going forward from here? Do you really believe that the arbitrator that the city had as their first choice suddenly ,after a 35 year career in the business, went rogue and decided he would end his career by not looking at all the facts and make an unfair ruling? I've seen your posts around on different forums and you never seem like a person who never believes what politicians say, so why now do you believe what the Mayor and his aides say?
I don't care about the arbitrator
the city can't afford it - I don't know for sure but it looks like he tried to equalize ff and cops - bottom line the operating budget is a fixed pie - we keep growing the pie by double the rate of inflation, increasing salaries and bennies by a slightly greater amount you end up in a death spiral - the numbers simply don't work. don't get me wrong - I love the ff and what they do - this is not anti-union or anti-ff - it's math. Why do I believe the mayor? Because I've analyzed the numbers myself for YEARS. I gave talks predicting this crash would happen. this one actually is due at least in part due to state aid cuts and so came earlier than most expected. Hold on to your seats because there's another one coming as the real estate tax pie growth starts to slow down. We've gotten double inflation increases because we've been building like there's no tomorrow. As the current freeze in construction hits the real estate tax (there's a lag of about 1-2 years) - this will happen again especially if bennies like insurance continue to grow at high single digit rates. Again nothing personal - it's just the way the numbers roll out.
And I don't care if the city DID have the money
Even if the city were swimming in money (HA!), that's no reason to simply hand it out to employees. That's not the way things work. You pay people a market rate. Of course, "market rate" is debatable, and that's where negotiations come in.
My main beef is that the arbitrator included $2000 (?) in the raise because he claimed this was the value of the drug testing. I don't believe drug testing is an item for negotiation and should have no influence on pay.
Didn't they also agree to pay more of their own
health insurance premiums? I could be mistaken.
They do
And there was some sick time concessions too. If done the right way, those two can save the City money in the long run.
Wouldn't the 'market' you
Wouldn't the 'market' you mentioned for firefighters be the police and bems? If so it would seem that the arbitrator did give the firefighters 'the market rate'.
No.
The market would be other (competing) Fire Departments, the amount of money the city has, and the amount of (qualified) people willing to be firefighters.
Not really, since not all
Not really, since not all cities are in as such good shape as is the City of Boston.
Right, thats why the market is better in Boston.
So if Boston pays 90K a year and Worcester pays 50K a year and Cambridge pays 75K a year..........where do you think your average person that wants to be a firefighter will apply for a job?
Or maybe in Sherborn the average firefighter gets to sleep through 45/50 shifts a year since they don't go out at night as much. Maybe that attracts some people.
Maybe another town gives you 12 shifts vacation a year instead of 8.
Fire Departments competing for the best workers is the market. The only difference is that state law dictates how departments (cities) are allowed to negotiate with workers. And then there is the whole civil service thing.
Stevil.
I had a question for you. If the economy was great, should the firefighters get raises, or should our property taxes (tax rates) go down?
And a seperate question that you probably know the answer to. How much money in property taxes did Boston get over the last 10 years?
they should get paid what they have to be paid
I had a question for you. If the economy was great, should the firefighters get raises, or should our property taxes (tax rates) go down?
Neither. They should be paid what is required to motivate people enough such that the city can staff stationhouses according to national standards with qualified individuals. That whole pesky thing called Capitalism, right? They don't have a shortage of applicants or firefighters, which means they're paying people enough.
The city could probably save a ton of money by having something other than just EMS and Fire. It's what they've been doing in Europe for years- small teams of firefighters that arrive in a small vehicle with just enough equipment to enter a burning building and get anybody out, or knock down that "kitchen stove fire"...before it becomes an 'apartment fire".
Getting to the scene FAST was found to be the most important than showing up with the kitchen sink. A small van or SUV can travel faster to the scene (and travel through narrower streets- remember that clusterfuck when a kid died because nobody in the City realized "gee, our firetrucks are too big to get around a street corner where people have parked close to the corner"?
You can buy a lot more small vans and SUVs than you can multi-million-dollar firetrucks, too. Cheaper and easier to repair, too.
Ah ok so on the police side...
Since they can only get about 50% of the amount of the qualified applicants they need to staff the department, they should raise the salaries in order to get more qualified people? Especially with all the corruption and laziness around right?
Or if an arbritator tells the City that they have enough money to fund salaries or libraries or schools, the city should just pay them since they have the money?
And the most important question I have is this: Why shouldn't my tax rate go down in a great economy?
I kind of agree about the small SUV argument. Maybe your buddy redsaidfred can add in why we need big trucks to go to these medicals. I heard they do that because the firetrucks are then on the street in case those firefighters need to go to a fire and they need all of them to show up at once. I mean, you still need the trucks. Adding SUVs isnt going to do too much since the EMTs are already going. Plus the firemen would just be sitting around anyway. And I also think the Fire Dept has SUVs in every station that arrives first at any major fire anyway.
Not to get too tangential
But until this city, state, and country are out from under their crippling debt loads we've been running up for decades AND putting aside enough money to cover our asses in the next global downturn/economic screw-up, then there's absolutely no reason the tax rate should ever go down in an up economy.
Pete
I don't have the numbers right in front of me but they get about 1.4 billion now. discounting back it was about $1 billion 10 years ago so the average over the last 10 years is about $1.2 billion - so probably total property taxes over the past 10 years is about $12 billion.
economy should have no bearing on taxes or firefighters. The city should make a strategic decision on how many and what kind of employees it needs to deliver the services reasonably demanded by its constituents. Then they should hire the people needed to fulfill those services at a competitive salary with reasonable benefits. What they actually do is figure out how much money they can suck out of our pockets and then figure out a way to spend it all. when the economy goes south (and often even when it's humming), they scream poverty so they can pay more people more money.
Again - I'm not knocking anyone - but the pool of money is a pie that is only so big - the schools get about 35% and the cops/ff's get 25% (those numbers haven't changed in years). that leaves 40% for everything else with health care and pensions eating an ever bigger share of that 40% that's left over.
Any idea how much
the new hotel and meals tax is generating?
Here's a link
Here's a link to the city's press release
http://www.cityofboston.gov/news/default.aspx?id=4330
It quotes $18 million. As I recall $16 million was supposed to be the meals tax - meaning an extra $2 million for the hotel - which I believe is incremental - not totally new revenue. they just increased an already existing tax. I heard recently during a community meeting or city council hearing they are getting more than they expected - I want to say about $25 million combined but I don't have a source for that - but it appears to have added about 1% to the budget.
One note on the attached - the article quotes the losses in state aid - these cuts were almost completely offset by increases in property taxes which is how we've managed to keep the budget relatively flat these past two years despite the huge cuts.
Thank
s!