Miami-Dade County is on the verge of blowing a big hole in its budget and, in the process, creating a totally unnecessary crisis for itself and county taxpayers. County commissioners, meeting on Thursday to ponder what amounts to a 5-percent salary increase for some workers, should hold the line unless they want to face a range of unpleasant consequences.
The commissioners have no one to blame but themselves for this self-inflicted dilemma. Back in mid-September, a bare-bones quorum — with only seven of 13 members present — voted 5-2 to override Mayor Carlos Gimenez’s veto and restore sanitation workers’ docked pay. That meant the 634 members of the union would no longer have to contribute 5 percent of their base pay toward group healthcare costs.
That decision had repercussions. First, another unit, representing aviation workers, automatically received the same benefit, thanks to a contract provision allowing it to piggyback on any other union whose pay is restored. Second, it provided ammunition for seven remaining collective-bargaining units to argue that fairness requires that they be treated alike. (A 10th union, the firefighters, has its own healthcare plan.)
If only it were that simple. Unlike the sanitation and aviation workers, whose budgets are generated by public fees for the services they provide, the remaining unions include police officers, general employees, transit workers and others whose salaries come from the general fund, consisting mostly of tax revenue. With a budget already approved by the county, the additional burden on the tax-supported general fund for the remaining nine months of the fiscal year would be about $27 million.
That’s where the unpleasant choices come in. Cut other parts of the budget. Raise taxes in the future to make up for this year’s shortfall. Or raid the reserves. The first two are problematic for obvious reasons, particularly with six of the 13 commissioners up for reelection in 2014. We doubt any of them want to run on a platform of raising taxes — or cutting services, for that matter.
Raiding the reserves is tempting — but it could be the worst mistake of all. The mayor’s office estimates it will have about $43 million or so in its reserve fund at the end of the fiscal year, only about half of what it should have. And last week, Moody’s downgraded the county’s credit outlook from “stable” to “negative,” citing worries about the emergency reserves.
Further depleting the reserves would put the county’s credit rating in jeopardy, which ultimately amounts to more borrowing costs for the county and its taxpayers. Raiding the reserves would amount to the county shooting itself in the foot.
Union workers and the county are locked in a dispute over another reserve fund, this one for health insurance. The county keeps enough money to pay for 60 days’ worth of claims. The union argues 30 days is sufficient. Florida rules ask for 60 days, and Mayor Gimenez says anything less is not prudent and would require pledging funds from elsewhere to cover any shortfalls — which he is unwilling to do.
Commission Chair Rebeca Sosa, who wisely voted against overriding the mayor’s veto back in September, says she wants to be fair to everybody. That’s a legitimate concern, but giving in to the unions at this point would create a budget crisis where none exists today. The best solution is to hold the line on salary increases.