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Salem officials may face a taxpayer revolt

July 25, 2010
Morning Journal News

Don't look now, but a taxpayer revolt to regain control of runaway public employee benefits is under way and looks like it is gaining momentum in Salem.

Two recent City Council actions there - placement of an income tax increase on the November ballot and revoking the reciprocity agreement for residents who work and pay income taxes outside the city - has turned up the heat on city officials and focused residents' ire on what some believe to be over-the-top benefits for public employees.

A recent "confidential" memo from Columbiana County Republican Party chief David Johnson scolding Salem's Republican officeholders for turning to tax increases before exhausting every available cost-cutting option, especially those involving exorbitant public employee costs, has been dismissed by some as just more rantings by the union-blasting GOP leader. However, Johnson isn't the only one taking aim at the city's tax increases.

Petitions were recently filed containing more than twice the required number of signatures to place on the November ballot an issue allowing voters to reinstate the 1 percent credit for residents working outside the city. City Council repealed the reciprocal tax agreement recently, but if 417 valid signatures are certified among the 997 collected, the issue will be on the fall ballot.

In his "confidential memorandum" obtained by the Morning Journal, Johnson tells Republican officeholders to not only pay their 10 percent employee share of pension pickup, but to immediately call upon all the city's employees to do the same.

Salem is the only municipality in Columbiana County, among the cities, villages and townships that employ a full-time police department, which actually pays the employees' 10 percent share of the Public Employees' Retirement System. It's doubtful that any other public employer in the state picks up its employees' contribution to PERS.

Council gave first reading Tuesday to an ordinance for council members and other elected officials who volunteer to pay their own 10 percent. The ordinance further forces all elected officials to pay the 10 percent at the start of their next term. It does not address the pension pickup of the city's union and non-union employees. Council members have spoken of negotiating additional pension pickup for employees, but also giving them corresponding raises to cover the cost, thus negating any cost savings to the city. Does this make sense?

According to Johnson, the annual overall cost of the pension pickup is $350,000. Coincidentally, by repealing tax credit the city expects to gain $350,000. Wouldn't requiring employees to pay their own 10 percent employee match, as every other municipality does, make more sense than increasing the taxes of a large segment of city's population, especially if you're going to ask them to support another tax increase as well? While it may be difficult to negotiate this increase with union contracts, facing angry voters with tax increases in mind has to be downright scary.

Salem officials need to get costs in line with what taxpayers can afford. No one feels that public employees don't deserve decent benefits. But, they deserve the best benefits the city can afford, with the emphasis on affordability.



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