Editorial: Costs of benefits need to be transparent


Published Oct 2, 2012 at 05:00AM / Updated Nov 19, 2013 at 12:31AM

In calculating the compensation for some Oregon public employees for labor negotiations, officials don’t include overtime, sick leave and employer payments to the retirement system. That means the actual cost of hiring some employees is higher than their official compensation.

What’s worse is that this illogic is mandated by state law. That needs to change.

The Salem Statesman Journal reports these misleading requirements apply to employees, such as police, who are not permitted to strike. Looser rules apply to others who can strike.

When compensation doesn’t equal cost to the employer, there’s a disconnect that masks the taxpayers’ full expenditure for that employee. And in contract negotiations, that means negotiations aren’t based on real costs.

Benefit packages are a growing issue in Oregon and elsewhere as costs for retirement programs escalate, and voters need clarity. Having a law that makes compensation mean one thing for one employee but something different for another just adds to the confusion.

Even without those legally-imposed oddities, it’s already difficult for taxpayers to judge the cost of their public employees, as revealed in a Portland State University study released in September. That study revealed that public employees’ benefits can be more than 100 percent of their base salaries. According to a report in The Oregonian, the benefits include overtime, paid time off, medical and post-retirement benefits, among others. It cited the example of a Redmond police officer for whom the benefits are 136 percent of base pay.

The results surprised even those closely involved, such as Sandy City Manager Scott Lazemby. He told The Oregonian that he and his colleagues expect benefits to add 30-40 percent to the base wage cost of an employee.

That’s the critical issue: If those responsible for hiring don’t know the costs, how can good decisions be made? The definition of compensation needs to be the same for all public employees, and the total cost of their benefits easy to see.