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Use It or Lose It: Cashing In on Unused Days Off

Gov. Christie argues that local taxpayers can't afford to let public employees rack up unused days off and cash them in when they retire.

Credit: Governor's Office/Tim Larsen

In four New Jersey municipalities -- Alpine, Hackensack, Jersey City, and New Brunswick -- every property owner is committed to paying more than $1,000 just to compensate workers for all of their unused days off.

According to the Christie administration, the total bill to local taxpayers for accumulated sick and vacation days if it had to be paid today is $825 million, and that's only for municipal employees. Including county and school workers could bring the total to twice that much.

Last Thursday, Gov. Chris Christie was back out on the stump seeking to end the widespread practice of allowing public employees to bank unused days off and be paid for at least a portion of the total accrued on retirement.

He reiterated his position during a press conference on Monday: Public workers should no longer be paid for any future unused sick days.

"It should stop today," he said.

That blunt assessment set off a storm of rhetoric that continued through yesterday, culminating in a theatrical showdown on the Senate floor. Republicans tried to force a vote on a bill to limit terminal leave payouts to $15,000, which Christie has conditionally vetoed as being too generous. The Democrats shot them down on a party line vote.

Ironically, the bill in dispute was originally a bipartisan effort.

Nevertheless, the Republicans outmaneuvered their opponents by bringing up a vote on the conditional veto. They could say that the Democrats refused to consider the veto, which they did. Or, if the Democrats agreed to a vote, the Republicans could argue that their rivals rejected the governor's call for no more sickouts.

For their part, the Democrats have offered to compromise by suggesting a smaller payout, which they say is needed to prevent workers from simply using all their annual sick days whether they are ill or not. (The typical worker is entitled to between 10 and 15 days a year.)

That is a proposal that the Republicans have dismissed as encouraging fraudulent behavior.

According to governor, employees who take a sick day when they're not sick are committing fraud.

"It's really quite sad that the best excuse Democrats can find for caving to Trenton special interests on terminal leave reform is that public employees will commit fraud unless they are paid not to do so," Sen. Joseph Kyrillos (R-Monmouth) said following the vote. "Sick leave is not deferred compensation, it is time made available to an employee in the event he or she falls ill. The majority's stalling tactics have reached new levels of absurdity, and are costing New Jersey taxpayers dearly."

"Compromise on sick leave pay can be had, if the governor wants it," Sen. Loretta Weinberg (D-Bergen) who has taken issue with the governor -- and he with her -- on more than one occasion, said last week. "We are still willing to sit down with the governor to reach agreement, if only he would step down from his town hall soapbox to meet with us."

Christie's response: "Zero should be zero and I don't see myself compromising on this." At this point, both sides are in a stalemate that appears likely to last at least through the end of this session.

The governor has been crusading against this practice for more than a year. In vetoing the legislature's most recent bill, Christie characterized the practice of awarding terminal leave payments as "a supplemental retirement fund paid for by the taxpayers for people who already have taxpayer funded pensions."

In the past, he has pointed to some of the largest payouts as being outrageous. For instance, at the end of 2009, four Parsippany police officers got $900,000 in compensation for sick, vacation and personal days they hadn't used; the highest payout was $317,000 to a lieutenant.

Parsippany's police contract now caps such payouts, as do many public employee contracts. A 2009 survey by the New Jersey State League of Municipalities found that 47 percent of towns cap terminal leave payouts for police and firefighters and three quarters cap such payouts for all other employees, while "a handful" no longer pay any terminal leave amount, said Lori Buckelew, a legislative analyst for the league.

Last Thursday, Christie cited other communities' large bills. Jersey City's is the biggest, with a current tab of $74 million to compensate workers for all their accumulated days, or $1,174 for the average property owner. New Brunswick's $14.5 million yields the highest bill per taxpayer of $1,330. (A complete list of municipal payouts is available online.)

"I'm not trying to take money out of the pockets of those who have already accumulated this and are counting on it for retirement," Christie said at last Thursday's press event with 11 local officials in Teaneck to push for movement on the issue. "We're gonna have to live with that. That's the law."

Not necessarily, and that is one of the biggest roadblocks to reform.

One of the first bills Christie signed as governor in March 2010 capped sick leave for new employees at $15,000. At the time, he said the measure was a start but "additional reforms" were needed. So when the legislature seven months later passed a second bill to close loopholes in the cap, Christie conditionally vetoed it and demanded zero dollars in sick payouts.

In his conditional veto, Christie is seeking to not only stop all terminal leave for new hires, but also to require workers to use any days they have already accumulated – and would be paid for – before using any new sick days. That would in effect, as the veto message put it, "assist in reducing supplemental compensation payouts."

Other loopholes were addressed as well. One was that the law did nothing to prevent workers who had accumulated a large amount of sick pay that they weren't going to be paid for to instead take weeks or more off from their jobs. In order to prevent that from happening the bills say that workers who want to take more than six days off must present a doctor's note.

"As a lawyer, he [Christie] ought to know that his proposal to eliminate existing local government liabilities for sick and vacation payments amounts to an unconstitutional taking," said Assemblyman John Wisniewski, D-Middlesex, deputy speaker and chair of the state Democratic party. "When the governor decides to have a serious discussion about the issue, Democrats have proposals they would be more than happy to discuss with him."

The Democrats reportedly have offered to compromise and cap payouts at $7,500, but Christie is not budging. He called their offer "simply unaffordable and absolutely indefensible."

The governor also dismissed a suggestion that providing workers with a small sick payout as an incentive would give employees a reason not to use all their sick days each year.

"Their [the Democrat's] argument is that people may use it otherwise in a fraudulent way, therefore we have to pay them not to commit fraud," Christie said on Monday. "We need to pay off every public employee 7,500 bucks so they don't commit fraud?" .

Last Thursday, Christie announced that 234 mayors support his effort.

"We believe something needs to be done to control the costs," said Buckelew of the league.

So does the New Jersey School Boards Association.

"NJSBA supports efforts that would enable local school boards to direct a greater share of limited resources to the education program," said Frank Belluscio, the association's director of communications.

But he said the group is concerned that any state-mandate cap would become the "default" amount, which could wind up costing some districts more, rather than saving money.

Although they disagree on the particulars, both NJSBA and the New Jersey Education Association say that most school districts and teacher unions have negotiated caps on the payment for unused sick time that average $12,000 or less.

Not surprisingly, public employee unions like the NJEA that are still smarting from cuts in their pension and health benefits are not happy with Christie's proposal to cut sick payouts as well.

"This would be a further intrusion into the bargaining process," said Steve Wollmer, NJEA's communications director. "If the governor feels strongly and the school boards feel strongly, the answer lies in negotiating new contracts … Bring your concerns to the bargaining table and then hash them out."

The school boards would like to have a new bargaining chip to bring to the table regarding sick leave. Belluscio said state law now requires districts to give school employees 10 sick days a year and specifies that all unused days be accumulated.

"We would support elimination of that requirement, which would give school boards more flexibility at the bargaining table," he said. While neither side appears willing to budge Buckelew said local officials are optimistic someone will blink.

"We just hope they work on a compromise."

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