As Christie Calls for Elimination of Worker Payouts, Township Says It's Already Controlling Costs

Barnegat officials say the township is ahead of curve when it comes to controlling sick and vacation time payouts for public workers due to the cap it imposed years ago, but Mayor Jeffrey Melchiondo said he doesn't disagree with Gov. Chris Christie's plan, reiterated yesterday at a press conference in Teaneck, to eliminate such payouts completely.

Gov. Chris Christie urged the Legislature on Thursday to pass his plan to eliminate the payouts for retiring public employees.

Joined by Bergen County mayors at an armory in Teaneck, Christie said the payouts amount to a “a going-away present to public employees who had the great good fortune of not being sick.”

Liabilities for unused sick and vacation day benefits total more than $825 million statewide, Christie said. The Department of Community Affairs puts the number for Barnegat at a little under $2 million, which is about what the township would be on the hook for if all of its current 120 employees accumulated Barnegat's $15,000 or $20,000 max in back pay.

“Every tax dollar that’s used to cash out unused sick and vacation days is a dollar that should be going to limit a tax increase and be sent right back to the taxpayer,” Christie said. "The only way to deal with property taxes is the lessen the amount we spend."

Christie called on the Legislature to take action during the remaining 30 days of the lame duck session. The Legislature has approved a $15,000 cap on the payouts and Democrats have proposed scaling it back to a $7,500 cap.

Barnegat is a few steps ahead of the legislature, officials said. By 2006, the township had imposed its own $15,000- or $20,000-per-employee cap on payouts.

“Before that, the township had to pay out literally hundreds of thousands of dollars to retiring employees for accumulated sick and vacation time,” said Barnegat Mayor Jeffrey Melchiondo. “It became a line item in the budget that had to be funded each year.”

A few employees remain on the payroll with grandfathered-in back pay that totals more than the new threshold, Melchiondo said, but the cap has been an effective way to curb the high cost of payouts.

Christie, however, said the payouts must be scrapped altogether.

“These numbers have no bearing to anything that’s real,” he said. “They’re just picking out numbers as a gift to public employees for not being sick.”

He said the argument made by some opponents of the reform — that employees would start using sick days as time off — is without merit.

"I can’t believe that we’re not going to do a common sense reform because we say we can’t control fraud," he said.

State Sen. Loretta Weinberg, who sat in on the press conference, said Democrats have made attempts to work with Christie.

“As with most things the governor brings up, reality is often a little more complex than his rhetoric,” Weinberg said in a statement.

“We need to ensure that in our rush to reform the system, we do not push long-time workers to the exit. If we do, local governments will be faced with having to pay all of those retiring workers now, inadvertently putting themselves in an even more tenuous fiscal position," she said.

Christie called the reform a “common sense” measure and stressed the bipartisan support of 234 mayors across the state.

Melchiondo said he doesn’t disagree with the governor’s push to eliminate the payouts.

“What we’ve done in Barnegat is working for us now,” he said, but controlling the costs from the state level “isn’t a bad thing.”

“In general, I agree with the toolkit items the governor has tried to get passed in the legislature, because it’s something that has to get done to get the finances under control,” Melchiondo said. “I’m glad he’s getting bipartisan support,” he added, “though I’d like to see 566 mayors signed on.”