Morris Twp. To See Savings, As Workers Pay More

Morris Township can expect to save tens of thousands of dollars over the course of Fiscal Year 2012 as a result of newly signed legislation affecting the pensions and benefits of public employees.

The bill requires police, fire fighters, teachers and other public employees to pay a greater portion of their health care and pension costs.

An announcement from Gov. Chris Christie's office recently detailed the amounts that local governments should expect to save on pension and benefit costs for non-uniform personnel and teachers. Uniformed personnel such as police and firefighters have a separate pension fund.

Morris Township can expect to save $43,293 on non-uniform employee pensions and benefits, cutting its contributions from $874,594 to $831,301, according to the announcement.

Morris Township should see additional savings from the Morris School District (which includes Morristown and Morris Township, and which receives students from Morris Plains), which will reduce its pension and benefits contributions to its employees by $72,500. The jointly owned  is expected to save $9,117, according to the announcement. 

Greater savings are anticipated in coming years, as the bill steps up public employees' pension and health insurance premium obligations over time.

"It will save the township money," Morris Township Mayor H. Scott Rosenbush said. "If it helps to maintain the health and integrity of the system, I'm all for it."

Rosenbush addressed the impact of the new legislation at the Township Committee meeting on July 20. Noting that the municipality had just resolved its contracts with multiple labor unions, he said the negotiated increases do not necessarily mean more money for public employees.

"After the [pension and benefit] changes, they may not see the increase,"  he said.

Asked whether this cost-cutting will mean a noticeable difference in residents' tax burden, Rosenbush said that "during this first round the taxpayer will probably will not see it in their tax bills."

That could change, he said, "in years two, three and four."

Gov. Chris Christie signed the bill late last month after lawmakers from both major political parties brokered the deal that upset unions throughout the state.

The reform bill requires state and local government workers who belong to the Public Employees Retirement System, as well as teachers and other education workers under their own retirement system, to pay an additional 1 percent of their salaries toward their pensions as of July 1—bringing them up to a 6.5 percent contribution. Another 1 percent would be phased in over seven years, for a total of 7.5 percent.

State and local police, as well as firefighters, must contribute an additional 1.5 percent of their salaries to their own pension funds. Local police and firefighters will be contributing 10 percent; state police will be contributing 9 percent.

The bill also moves the retirement age for new teachers and non-uniformed employees from 60 years old to 65. To be eligible for early retirement, the employees now have to work 30 years instead of 25.

The bill will have a more significant impact on the cost of health benefits, as it requires all public employees and certain public retirees to contribute toward the cost of health care benefits coverage based upon a percentage of the cost of coverage. Public employees could see current health costs at least doubled, or tripled in some cases, with increases phasing in over four years.

Chris Kelly, business administrator for the Morris School District, said, "The contributions by teachers will offset some of the increases to health benefits. It will benefit the district. In the past the district–hence the taxpayer–had the burden of tax increases. This will help offset that."

With the Morris School District for two years, Kelly spent her previous 30 years in corporate America.

"I'm used to paying benefits," she said. "It's the law ... They [the teachers] knew this was coming."

But the local teachers union representative said the bill has public employees unfairly paying the price for years of financial mismanagement by the state—and could mean fewer people consider becoming teachers.

"I see some major changes on the horizon," said Smitty Horton, dean of students at , who serves as the teachers union representative for the Morris School District. "I also believe there will be a decrease in the number of quality candidates that are considering teaching as a career in the future," he said.

Horton said he hopes that's not the case, "but I don't see people choosing a career where they are blamed for every financial mistake made in Trenton, especially when they have had nothing to do with any of those decisions.

"Many of our valued employees have already decided to retire instead of suffering any further attacks on the benefits that they have earned over their years of service," Horton said.

It's not just teachers who could decide to retire early. Timothy Quinn, Morris Township administrator, said earlier this month that he "would not be surprised if there are more retirements [among township employees] following the new legislation," but said retirements had been minimal in the run-up to the legislation's passage.

Patch would like to interview additional members and representatives of the affected unions for their perspectives on the impact of the new legislation, or on other changes being considered for public employees. If you are a member of one of the unions and would like to discuss the changes in your pension and/or benefits plan, or would be interested in submitting a letter to the editor or guest column on the subject, please e-mail Kathy.Shaskan@Patch.com.