RSS Feed |
|
|
|
|||||||||
|
Would End Repayments
Ends Piled-Up Debts "You're never going to make everybody happy," said State Senator Martin J. Golden, one of the bill's sponsors. "This is a more structured system, so that you wouldn't worry about piling up all sorts of money." The measure would bring New York City in line with other regions, he added. But some officers and their families are lobbying for the city to completely forgive the debt, one source said. Most of the approximately 1,800 city workers called up after 9/11 have decided to remain on the city payroll while also receiving their military salaries to allow their families to continue to get the city's generous health benefits. Remaining on the city payroll also enabled the officers to continue to contribute toward their pension and deferred compensation plans.
That repayment, however, has created much confusion concerning tax obligations and forced officers' families living on fixed incomes to suddenly deal with added cost to their bills ranging from $30,000 to $100,000. "Although the current program is extremely generous, the city is aware that the receipt of two salaries, with an obligation to repay the lesser upon return, has, in some instances, created challenging situations for some city employees," said Mayor Bloomberg's Legislative Director, Michelle L. Goldstein, in a letter of support to legislators. The issue first surfaced in 2006 after scores of returning officers began receiving letters from the Police Department spelling out their obligations. The initial calculations required them to also repay the housing and food allowances that they received while serving in the military. A Break From Mayor On Veteran's Day last year, the Mayor gave them a pass on those reimbursements after the reservists, many City Council Members, and law-enforcement unions complained of unfair calculations, which led to bills of up to $200,000 for some officers.
After reviewing the situation, the city recently moved to strongly back the state legislation that would create a system where the higher of the two salaries would be automatically applied when a city worker is called up to active duty. That would prevent reservists from having to make repayments upon returning from service. "This bill is a good bill for people going forward," said Kristen Zak, whose husband, Michael, is an NYPD cop who served in the military in 2002. "But as far as the people already home and who already owe the city money, it doesn't address everything it should." The reservists were required to pay taxes on both their city and military salaries, Ms. Zak and others pointed out. "You are basically being taxed twice," she contended. "If you saved everything, you'd still be short around 30 to 40 percent." Ms. Zak, who is the Deputy Chief of Staff for Staten Island Councilman Michael E. McMahon, argued that the bill should do more. "It doesn't say anywhere how you should handle your taxes," she said. To help ameliorate some of that confusion, DCAS last year also started a plan to provide free tax advice to assist eligible veterans. The service is provided by H&R Block and Jackson Hewitt Tax Service at any of their branches in the metropolitan area. But many have since questioned how those companies could handle complex tax issues that have confounded even veteran accountants. "I don't know anyone who has used them," Ms. Zak remarked. DCAS Not Talking DCAS has repeatedly declined requests to detail how many reservists have actually sought the help of those firms. "The city doesn't have any records of that," DCAS spokesman Mark Daly said. The department is still struggling to figure out how much money all of the reservists owe to the city. "I'd like to know how much money they are spending trying to figure this out," said Ms. Zak. "They might be spending more time calculating how much people owe than they might actually get back." Citing the unresolved tax consequences and other issues, Councilman McMahon and others are urging the State Legislature to amend the measure before the next session, which is tentatively scheduled for mid-December. "I am concerned that this legislation does not address the excess taxes paid by employees who received both city and military salary during deployment," he said in a letter to state lawmakers. "The city continues to demand payback of gross salaries and I believe this creates a 'double taxation' that is unfair to these employees." 'Consider Lost OT' The bill, he added, also does not consider that many of the city employees - particularly police and firefighters - earn a significant portion of their yearly salary in overtime. "There should be a recognition of lost overtime," Ms. Zak argued. "When they were deployed, they were forgoing a large part of that income." A true pay differential program, Councilman McMahon contended, should include some consideration for that lost overtime as part of the calculation. He has proposed an across-the-board 20-percent credit to be subtracted from debts owed in recognition of the loss of overtime earnings. DCAS, however, has opposed adding such a credit, which would increase the city's costs, sources said. "The City of New York worked closely with the bill sponsors and reached agreement on legislation that will further improve our benefits program for military reservists who are city employees," Mr. Daly said in a statement. "We are pleased that the State Senate has already passed this bill and we are confident that the Assembly will do the same." Another major matter of contention is what percentage of yearly pay the city should be allowed to subtract from employee's salaries. A 10-Year Payout Under the Senate's measure, reservists will have 10 years to pay back the money, with the city removing up to 7-1/2 percent from each of their bi-weekly paychecks. Currently, they have five years, with 10 percent removed from their salary. "Garnishing a city employees' wages by 7-1/2 percent will place a significant financial burden on employees and their families," Mr. McMahon contended. "This amount should be reduced." The state legislation also includes a "hardship" provision, allowing the reservists to negotiate new repayment terms with the city if necessary. Reservists are also permitted to make a balloon payment, but most can't afford to pay off the debt in one shot, Ms. Zak said. "You can also sell the city back comp time, but then they charge you taxes on that time. So it's like how many times do you have to pay taxes on this money - is it three times, four? It's very confusing." Bill for 30 Days' Leave The bill, which is being sponsored in the Assembly by Rory I. Lancman, has already been amended at the request of city officials. The original draft required the city to provide a one-time allotment of 60 days of paid military leave per year, as is afforded to state employees. But the present version increases the statutory entitlement from 22 work days or 30 calendar days to a standard 30 work days, DCAS said. Amy Maniscalco, whose husband, Louis, served in the National Guard, has led a grass roots effort to amend the bill and get added help for the returning vets. She has been highly critical of the Bloomberg administration and DCAS in particular for failing to put a more structured system in place from the start. The city's ad hoc policy violated the Federal Uniformed Services Employment and Reemployment Rights Act (USERRA), she contented. "We believe the Mayor had honorable intentions; unfortunately they didn't follow through with IRS and USERRA regulations," she argued. 'Will Never Recoup' Ms. Maniscalco also noted that the reservists paid taxes on both salaries. "There's been so much mismanagement and the city hasn't sat down with the IRS to figure this out," she asserted. "The big issue here is we will never be able to recover the taxes that we already paid." In her letter supporting the state bill, Ms. Goldstein, the city's Legislative Director, acknowledged some of the problems created by the current system. "We are aware that it has been difficult for some employees to manage the receipt of two salaries in a manner which would allow them to comply with the repayment terms to which they agreed." The proposed military pay differential measure would greatly simplify the program, her letter added. DCAS's chief spokesman maintained the city had worked to ease the transition. "While we recognize that the program's repayment obligation may pose challenges for some reservists due to their individual circumstances, we have taken great strides in the past year to set policies that are clear and fair, to standardize and streamline the repayment process, and to inform reservists about their options, including their opportunity to request alternative arrangement based on demonstrated financial hardship," he said. It remains unclear, however, if the bill will move forward in the Assembly before the end of the year. "If we don't do this in December, then we have to start over next year," Mr. Golden said. "They deserve more; they should have direction." Assemblyman Lancman said that the he would not move the legislation along until DCAS assures him in writing that the reservists can file an amended tax return for a reimbursement for the added cost. 'Must Correct Flaws' "This is a good bill," he asserted during a Nov. 8 phone interview. "I'm proud of this bill and it solves a lot of problems, but there are a couple of key sticking points, which are necessary to resolve before we can say that we solved this problem for current employees."Mr. Lancman said that the city has repeatedly declined to give him any assurances in writing. "If the city's representations cannot be verified or are proven to be untrue, then it's better to hold the bill and make whatever changes are necessary and pass a better bill," he remarked. "The city has known all along that we are not going to pass a bill unless it has the support of the employees that we are trying to help." He added, "There's a saying that you can't eat an elephant in one bit, but the tax issue has to be resolved before going forward." He also blasted the Bloomberg administration for failing to excuse the entire tab. "I think the city is being a miser and should forgive the entire debt in gratitude, but I understand that what we are working on here is legislation to make the current system fairer," he remarked.
Mr. Golden, however, blamed Mr. Lancman for holding up
the bill, urging him to look past the measure's few critics. "The difference
between a politician and a statesman is you have to see through the quagmire and
do the best for the people that you serve. It's overdue." | |||||||||
)
