The future for Miami-Dade County employees: lower salaries, or more costly health benefits

(MIAMI HERALD)   Miami-Dade Mayor Carlos Gimenez’s proposal to slash county spending by doubling employee contributions to their health insurance is set to be revamped. The new plan,coupled with previously announced salary reductions, would chop base pay for county workers between 11 and 21 percent.

Under the revised proposal, a proposed 10 percent pre-tax healthcare contribution will be swapped for an 8-percent salary reduction. The mayor also is sticking by his pledge to erase pay increases granted by his predecessor, Carlos Alvarez, which were a 3 percent hike for most workers and a 13 percent jump for police.

“These decisions are difficult to make,” Gimenez told The Miami Herald, “but given the tough economic times that our residents have been facing, I must call on our public servants to make a shared sacrifice as well.”

Labor unions have generally opposed base-pay reductions because pension benefits, overtime compensation, and payouts for accumulated sick and vacation time are calculated from that base.

The move, prompted by a new interpretation of federal tax law by the county’s benefit consultant, could potentially deepen tensions with unions that were already upset about Gimenez’s previous cost-cutting proposal.

“My preference, of course, is none of the above,” said Greg Blackman, president of the Government Supervisor Association of Florida Local 100. “If we have to do something, I would prefer doing something with benefits or even a furlough. But not a salary reduction, that’s something that would cause a long-term hardship.”

Gimenez’s initial proposal, announced last month, would have required employees to pay 10 percent of their salary pre-tax toward their health insurance — an increase from their current 5 percent contribution.

Despite the poorer long-term implications for workers under the new plan, in the short-term the change in approach should not make a big difference in employee paychecks — other than for those who log significant overtime.

Still, one union leader balked at the change.

“My official statement is, I can’t tell you a statement because it would be too vulgar,” said police union president John Rivera, whose members are now poised to be hit with a 21 percent decrease in base pay.

Commission Chairman Joe Martinez was on vacation and not available for comment, according to his office.

The changes to Gimenez’s proposal were prompted by the county’s benefits advisor, Deloitte Consulting, which raised concerns that a 10 percent pre-tax health insurance contribution runs afoul of federal tax law.

The interpretation represents a switch by the consulting firm, according to a memo Gimenez sent to commissioners Wednesday. Previously, the advisors had “indicated that there was no limitation upon increasing the employees’ pre-tax contribution to the county’s group health plan,” the mayor wrote.

The 8-percent pay cut would save the county the same amount of money as the 10-percent healthcare contribution would have, Gimenez said.

Another reason to scrap the mandatory employee healthcare contribution, Gimenez said: In 2014 the county will no longer be able to require employee participation in its healthcare plan due to changes in federal healthcare law.

The concessions from roughly 26,000 employees are a critical part of Gimenez’s plan to plug a $409 million budget gap for the upcoming fiscal year, which starts Oct. 1. He anticipates achieving about $135 million in savings from employee givebacks.

Commissioners will meet next month to vote on the budget changes.

Meanwhile, contracts with the county’s labor unions expire at the end of September, putting a premium on the need to quickly ink new deals that include the cost savings.

Still, on Wednesday Gimenez said he’s still willing to listen to alternatives, as long as they would achieve similar cuts. “If a labor union comes up with an equivalent saving that is verifiable and recurring, we are willing to look at it,” he said.

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