THE LANDMARK VIEW
There’s no doubt that when the nation’s economy collapsed in the fall of 2008, it had a profound effect on government agencies from top to bottom. The impact certainly was felt in North Riverside, as sales taxes nosedived. For a village like North Riverside, with a small residential property tax base, sales taxes are crucial, perhaps the crucial, source of revenue to fund general operations
As a result of the failing economy, the village has had to cut back. They froze salaries for non-union employees for a couple of years. They did not replace staff positions when retirements happened. They decided to make no contributions toward police and fire pension obligations for four straight years. They dropped expensive village-sponsored events.
The hard times have not ended.
But in some respects, the crisis was self-inflicted. And that is nowhere more evident than in the village’s decades-long decision to provide lifetime healthcare benefits to its employees, a decision that has cost millions that could have gone toward services or saving for times like now, when the revenue has flatlined.
Those in the private sector can only look on in astonishment. The village provided (and will continue to provide decades into the future, basically until all current employees and their family members have died) healthcare coverage at a fraction of what it costs almost anyone who has a private sector job.
Insurance coverage doesn’t end at retirement; it continues as if that person were still employed, paying the same rates as if they were still employed. If a former employee chose family coverage – and most did – the $1,000 or so paid by the employee was paid 20 times over by taxpayers, every year.
At this time there are almost as many retirees on the village’s health plan as there are current village employees.
That perk is about to change somewhat with the ratification of a new contract for the village’s firefighters. Under the terms of the new contract, any firefighter hired from here on out will no longer be offered the post-retirement health insurance coverage their brethren will get.
The village expects to roll out this plan to its police and dispatchers unions, hopefully this year. Then the plan is to roll it out to the non-union employees. Eventually, those dollars will make their way back into the village’s coffers. But it’s going to take decades, with police and firefighters retiring in their 50s.
These kinds of perks may have been defensible in the days when village employees, police and firefighters were paid less in exchange for generous benefits. But those days are long gone. Police and firefighters are well-paid and typically continue to get generous benefits. It’s high time for the post-retirement health coverage perk to fade away.
It’s also time for the village to re-evaluate its health insurance perk for elected officials. While the perk ends when elected officials leave office, we see no reason why part-time elected officials should receive taxpayer-subsidized health insurance.
Village officials have identified millions of dollars in potential savings by eliminating the post-retirement perk for employees. Tens of thousands of dollars more can be saved by eliminating the perk for elected officials.
