Politics & Government
Efforts To Reform Unused Sick Time Payouts Hit Home
As Gov. Christie seeks to eliminate big retirement payouts for unused leave, Ocean County and local municipalities look at how the changes would impact local budgets
is taking a stance against retirement payouts for unused sick time, a stance that could mean both long-term savings in local budgets and a short-term budget crunch as longtime employees rush to retire before the governor’s proposed reforms take effect.
That effort, as a result, could have an impact on the county level. Some 27,000 days of unused sick time have been accumulated by the 1,940 public workers in Ocean County, amounting to more than $2.3 million in potential payouts.
At issue is the longstanding practice of retiring municipal employees being paid for all or a portion of the sick and vacation time they did not use during their employment.
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In some cases, critics argue, those payouts have been excessive. A 2009 report by the state Commission of Investigation outlined dozens of cases in which municipal employees in the state retired, receiving six-figure payouts for unused sick time and vacation on their departure.
According to the governor’s office, there is currently some $825 million statewide in unused sick time accrued by municipal employees. In other words, if all qualifying municipal employees retired tomorrow, New Jersey towns would immediately be on the hook for $825 million.
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That scenario is highly unlikely, but the money does add up. Last year, New Jersey towns paid out $43 million for unused leave. Payouts for unused sick time and vacation amount to an additional $250 in property taxes each year for New Jersey residents, according to the governor’s office.
Christie wants an end to the practice.
Though Christie claims more than 230 mayors, including Manchester Mayor Michael Fressola, have put their support behind his proposed reforms, support is not universal.
Some, such as state Sen. Loretta Weinberg (D-Bergen), hope to instead institute a $15,000 per employee cap on such payouts. Such a cap has existed for state employees since 1986.
However, local, county and school employees are not subject to a cap save in cases where the township itself negotiated one. Lawmakers hoping to get a compromise from Christie suggest that completely eliminating these payouts would prompt a rash of retirements prior to the measure going into effect.
