The Good, the Bad and the Gimenez of the 5% Debate

(Excerpted from Miami Herald story: Miami-Dade County workers’ pay at center of union hearings)

It has become a dreaded routine for the Miami-Dade County Commission: asking public employees to give up some of their benefits and wages to keep the government financially afloat.

On Thursday, commissioners will consider Mayor Carlos Gimenez’s latest request to require workers to contribute 5 percent of their base pay to cover group healthcare costs for another year.

This time, the mayor may have a harder time finding consensus among commissioners.

The commission has already defied the mayor and eliminated the 5-percent contribution for two labor unions. That decision, overriding a Gimenez veto in September, set a precedent for the remaining seven unions fighting the proposed extension, union leaders say.

But restoring all workers’ pay would come at a price: Gimenez’s administration says it would have to find some $80 million in the county’s $4.4 billion operating budget. That number would be $60 million for 2013-14 because only nine months are left in the fiscal year that began in October.

In September, commissioners signed off on a budget that extended the 5 percent contribution, which has been in place for four years. To end the concession two months after the budget went into effect without having set aside any funds to pay for it would open up a mid-year funding gap.

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“It would be irresponsible,” Gimenez said of forcing the county to dig for the money. “You create a problem where there isn’t one.”

The funds could come from Miami-Dade’s reserves. But the pain from raiding those accounts would be felt the following year. Replenishing the reserves would require cutting other parts of the budget — or raising the property-tax rate.

Those are unsavory options for commissioners, especially for the six of 13 who will be on the ballot in 2014. But the alternative of upsetting the unions is no better. While labor has lost some political clout, it can still turn out high numbers of voters in local elections.

Union leaders contend that ending the concession should not lead to difficult budget cuts down the line. For months, they have argued that the county could tap a health-insurance reserve and keep it at a lower funding level into the future.

Keeping the tax-rate flat meant potential closures, cutbacks and layoffs to the library and fire-rescue departments. Commissioners averted the reductions by depleting the library department’s financial reserves and applying for a federal grant for firefighter jobs that has yet to be awarded. Those measures, however, will only temporarily hold off the cuts.

Last week, Moody’s downgraded the county’s credit outlook from “stable” to “negative,” citing worries about Miami-Dade’s emergency reserves. Gimenez’s administration fears turning to the rainy-day funds to restore employees’ pay could hurt the county’s credit rating, making borrowing money more expensive.

Ed Marquez, deputy mayor for finance, said forecasts by his staff showed a downgrade by one notch would cost the county about $111 million over the next 20 to 30 years, thanks to higher interest rates on bonds Miami-Dade plans to sell for various projects, including the Jackson Health System’s expansion plan approved by voters.

Year-end shortfalls on property taxes and other revenue squeezes already have the county’s emergency cushion lower than planned, he said.

But union leaders are skeptical of the county’s numbers. The relationship between Gimenez, whose candidacy most unions did not support, and labor has become increasingly strained, with new contract negotiations looming next year.Earlier this month, the Florida Public Employees Relations Commission upheld a ruling that the county had violated state law by bargaining in bad faith with the Police Benevolent Association in 2011.

At issue was Gimenez’s push to impose an additional 5 percent healthcare contribution, on top of the existing 5 percent. The PBA objected to that concession but agreed to other benefit cuts, including freezing merit pay increases and longevity bonuses, on the promise that no police officers would be laid off.

Yet when commissioners initially rejected Gimenez’s 5-percent proposal, the administration issued layoff notices anyway. Though commissioners ultimately adopted a year-long 4-percent increase and saved all jobs, PERC said the county’s position “was not transparent.”

PERC also ruled that the PBA had failed to prove other charges against the county.

In addition to county professionals, supervisors and police officers, the other five unions at impasse represent water and sewer workers, general employees, transit workers, Jackson support staff and Jackson healthcare professionals, physicians and registered nurses.

Martha Baker, president of the healthcare professionals’ union, Service Employees International Union Local 1991, said she fears extending the healthcare concession will attract fewer nurses and push more Jackson-trained nurses to leave the public hospital for better-paying jobs.

“Everything has consequences,” she said. “It would be bad business to maintain these concessions.”

In September, commissioners ended the 5-percent contribution for solid-waste and aviation workers. Firefighters are exempt because they have a separate health-insurance plan.

Among the commissioners who advocated for either restoring all or none of the unions’ pay was Chairwoman Rebeca Sosa, who said she is still concerned about an equitable policy.

“I stand by what I said,” she said. “Now the analysis will be, ‘How do we make it fair for everybody?’”