Assemblywoman Nancy Munoz is looking to expand her previous legislation to provide the state government the power to punish municipalities that provide excessive leave payments.
Munoz recently announced plans to punish a municipality that violated the law by cutting their state aid in an amount equal to the unlawful payments as well as reintroducing legislation to end all forms of public employee payouts. The Assemblywoman touted the move as saving billions of taxpayer dollars.
“What good are laws if there is no way to enforce them?” asked Munoz (R-21). “I’m beefing up my existing bills to make sure there are clear consequences for municipalities that ignore the laws, which has allowed public employees to profit off the taxpayers. I want to put an end to the blatant waste and abuse.”
OSC Report
The push comes in the wake of a New Jersey Office of State Comptroller (OSC) report earlier this month tht found that 57 of 60 municipalities failed to follow the 2007 and 2010 laws regarding unused sick leave payments. Eighty percent of the 60 towns that were surveyed let employees cash out their sick time when they resign or change jobs, 60% allow payments over the $15,000 cap and 48% can give employees annual payouts for their unused sick days.
Munoz said the new legislation is in response to the claims of the Department of Community Affairs’ Division of Local Government Services says it is powerless to stop municipalities that are in violation of the 2007 and 2010 laws that placed limits on when and how much local government employees may be paid for unused sick leave.
Holding Town Accountable
“My bill would empower the state to penalize those towns that knowingly violate the law. They must be held accountable for abusing taxpayer dollars,” added Munoz.
This is not a new issue for the GOP Assemblywoman. In 2008, Munoz introduced A-221 which would ensure sick-leave payouts do not count as compensation when calculating public employee pension benefits. Then, in 2012, Munoz introduced a bill (A-220) which would prohibit payouts to public officers or employees for accumulated unused sick leave.
“Ending sick-time payouts could save local governments possibly billions, plus billions more by ending all other non-salary payments, such as terminal leave payouts, severance and retirement payments, unused leave cash-ins, health benefit waiver payments, and longevity checks—all of which increase pension costs,” Munoz said.
Reduce Property Taxes
Munoz argued that sick leave was “an insurance policy in the event you are too ill to work” and was never meant to be used as a bonus, but public employees had been paid hundreds of thousands of dollars when cashing in their accrued time.
“One of the ways to drive down our nation-high property taxes would be to eliminate the sick leave payouts. I have been pushing for this for more than 10 years and this report underscores the urgency to stop this abuse of taxpayer dollars,” Munoz said.
Among the North Jersey town cited in the report are Hackensack; Lyndhurst; Mahwah; Ridgefield; and Rutherford in Bergen County; Belleville; East Orange; Verona; and West Orange in Essex County; Hoboken; Union City; and West New York in Hudson County; Dover; Florham Park; and Lincoln Park in Morris County; Clifton; West Milford; and Woodland Park in Passaic County; and Sparta and Wantage in Sussex County. No municipalities in Warren County were surveyed.
O’Scanlon Statement
“Year after year, towns spend taxpayer money to fund costly, wasteful year-end bonuses for public employees that are hidden from taxpayers,” said Acting State Comptroller Kevin D. Walsh in a press statement with the reports release. “The laws on sick leave payments are being ignored by a lot of towns, and this is putting a financial strain on taxpayers. Mayors and council members who want to lower property taxes are missing an opportunity to do so.”
The OSC report was prompted when State Sen. Declan O’Scanlon (R-13) sent a letter in February 2021 requesting that his office conduct a broader investigation after it uncovered that the law was being flagrantly flaunted in at least one municipality. O’Scanlon praised the Comptroller for his taking up the cause and for the meticulous report.
“Although I am thankful that a detailed review took place, these results are stunning and clearly demonstrate that limiting payouts by law isn’t enough—we also need to be diligent in educating local officials and enforcing the law to protect property taxpayers by making sure municipalities comply,” said O’Scanlon (R-13). “Reforms don’t work unless they are enacted. Leaving precious property tax savings on the table is a slap in the face to taxpayers. And these costs are potentially significant in many municipalities.”
Review After Palisades Park
O’Scanlon request was in response to numerous complaints that public employees in certain towns in Bergen County were receiving sick leave payouts on an annual basis and in excess of the $15,000 cap. After a thorough investigation, the Comptroller released a report in March 2021 that highlighted widespread violations in Palisades Park—a borough in Bergen County with a population of 20,000 residents.
“The latest report from the Comptroller has demonstrated that this egregious behavior is not limited to a small borough in Bergen County—it is far more pervasive,” added O’Scanlon. “Our challenge now is figuring out how to make sure this stops.”
“People need to understand that it is the job of government officials to be up to date on what our laws are. It ought to be the responsibility of municipal attorneys, labor attorneys, and auditors to ensure their municipalities are complying with the laws we passed.”
Statewide Problem
The Monmouth County lawmaker revealed that he is in conversations with the League of Municipalities to develop an education program to alert local officials that will include sending out a letter to all 564 municipalities.
O’Scanlon said he was alarmed at how widespread the behavior truly is.
“This is clearly a statewide problem that has most likely cost taxpayers many millions of dollars over the last several years,” he said. “I am glad that (the OFC) was able to uncover the truth and shed some light on this conduct which, at the very least, is lazy and incompetent—and in the case where the law is being intentionally ignored—reprehensible.”
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