Summarizing City’s Initial Recommended Contract Conditions with General Employees

• A 5% wage reduction;
• A 2.5% merit increase instead of 5% merit increase;
• Loyality payment reduced from 5% to 2.5%;
• Eliminate $30/month for HMO coverage, a  $23.46/month reimbursement;
• City will pay 80% of health insurance premium instead of 100%;
• Eliminate payment for excess overtime hours;
• Over night compensation increase reduced from 7% to 2.5%;
• City may change assignment of cellular phones at its discretion;
• A number of pension fund parameters changed including use of last five years average compensation and institution of the “rule of 80”, use of base income only, 2.25% benefit multiplier, increase of contribution from 5% to 10%; and
• Tuition benefit reduced form $6,000 to $4,000 annually.

Fixing the US Fiscal Mess (and Ideas that Apply to the Coral Gables Mess)

Four steps for fixing the fiscal mess of the US (from what is called “liberal economics”):

For the US, what is needed.

[1]…comprehensive tax reform aimed at aligning tax policy with desirable economic incentives..the US should look hard at tax breaks that act like hidden spending programs [the mortgage tax deduction, especially]..[2]carbon pricing, either by auctioning emissions allocations or by taxing carbon directly, at rates that start low and rise over the coming decades…a carbon tax would increase both government revenue and economic output – primarily by replacing existing, inefficient energy subsidies…[3] a tax on the financial sector, in the form of a Financial Activities Tax on profits and remuneration at big banks that enjoy implicit government guarantees…[4] the issue of entitlement spending, which is mainly an issue of health-care costs… [social security is not that bad off]

For Coral Gables, what is needed.

1. Coral Gables and other municipalities need sources of income other than the current failed property tax system.  Let these municipalities lobby in Tallahassee for a change in the way property taxes are charged (especially eliminate the homestead treatment so the property tax pain is evenly distributed).  Florida could use a small income tax as well, but that should take forever to happen.  Both tax systems subsidize the wealthy newcomers who should pay a higher share of public services.
2. Coral Gables should eliminate numerous subsidies.  Why is trash collection subsidized? Why should the city subsidize private foundations activities?  Why should the city build a museum in the middle of an economic crisis? Let those who want cultural activities pay their own way.  Why should the city pay for all of the health costs of the employees–there is no incentive to manage the funds, except to cut back on the coverage by the city.   Why should the city subsidize the Coral Gables Country Club and the Biltmore Hotel.
3. Coral Gables should freeze property taxes while the economy is in trouble.
4. The city should go forward on reorganizing departments and cutting back middle and upper management staff who carry a heavy cost for the city.  What has happened to the promises to reorganize the city government.
5. Compare Coral Gables police and firefighter numbers with other cities.  I heard a (here unnamed) Commissioner say that it is well known that the Police Department is overstaffed compared to similar cities.
6. Follow the City Manager’s lead in his negotiation with the International Teamsters Union Local and cut back on salaries and pensions that are outlandishly high.  Employees should face reality–either take a cut or lose your job.