This column ran in the Capital Gazette on 1/3/14 and
in the Maryland Gazette on 1/4/14
If Bill 85-13 passes Monday night, Anne Arundel County will see a mass exodus of the county’s public safety personnel and other employees. This will not only severely affect the county’s ability to provide high-quality services to our residents, but will also cost the county many tens of millions of dollars in additional recruitment and training costs plus increased overtime.
The goals of the bill are laudable – to reduce unfunded retiree health care costs and require the county to start setting aside money to pay them. However, the bill includes so many elements that strip employees of protections and shift costs from the county to employees that it will drive a lot of employees to leave.
Employee health insurance costs are already set to increase by an average of about 50% in 2015. If this bill passes, it is estimated that the average employee will see their annual insurance costs increase in two years by 130%, from $1,808 in 2014 to $4,144 in 2016. And some employees will see far bigger dollar increases. For example, employees who insure their family on the Triple Option plan will see their premiums jump from $4,801 in 2014 to about $10,114 in 2016, an overwhelming increase for employees earning an average of $55,000 per year. Retirees too young for Medicare will also see substantial cost increases.
When first responders and employees made the decision to work for Anne Arundel County, they often accepted lower salaries than they could have made elsewhere in return for good benefits and the promise of a secure retirement. Breaking that promise after they’ve invested 10, 20 or 30 years serving the citizens of Anne Arundel County is patently unfair.
Bill 85-13 allows current employees to keep their original retirement benefits if they quit before specified times during the next three years. And quit they will. In an early-December survey of 744 current employees and 297 retirees exploring the impact of potential changes in Bill 85-13, 36% of current employees said they would quit or join the DROP program before the bill took full effect. While a few of the worst elements under consideration have been dropped by the County Council, the majority of the changes employees and retirees found most concerning are included in the final bill. When respondents who expressed concern about the dropped elements are excluded from the survey, 32% of the remaining employees said they would quit or join the DROP program. Learn more about the survey results and how the final bill will change health care benefits at www.AACBenefits.com.
When told by union leaders that the bill would cause a mass exodus of employees, County Executive Neuman’s response was along the lines of “Let them leave; we’ll hire more”. Not only is this attitude a slap in the face to every county employee, but it will cost the county dearly. The county has invested at least $76,000 in training every firefighter and police officer on our force, and as much as double that to train our paramedics. If even 25% of our public safety personnel leave within the next few years, the cost to recruit and train their replacements could exceed $30 million dollars. Plus we’ll need to pay more for overtime caused by vacancies.
But with new employees being offered an even poorer benefits package than existing employees, the greatest cost to county residents will be our inability to retain and recruit top-quality employees. To those who think this doesn’t matter, let’s make it personal. Imagine getting a call a few years from now that your spouse and daughter have been in a terrible car accident. As they fight for their lives, who do you want there beside them – a well-trained paramedic with fifteen years of experience or an EMT who couldn’t get hired elsewhere who’s recently completed his training?
There is no question we need to control and start funding our retiree health care liabilities. But rather than passing a bill that will drive away many of our best first responders and other employees, let’s start by funding a Retiree Benefits Trust Fund and making a few less-controversial changes such as doubling the current vesting period. After the current turmoil in the health care market settles down, we can make additional changes as necessary.