Strained municipal budgets are forcing government employees of at least two Lake County cities to take furlough days this year.
As local governments continue to grapple with the affects of property tax caps, and in Lake County, frozen tax levies, most have resorted to cost-cutting measures that have directly impacted their workforce.
Eliminating positions by attrition, offering early retirement buyouts, increasing health care costs and layoffs are some of the strategies Northwest Indiana governments have used to trim costs.
In Gary and East Chicago, the need to cut means employees must take days off without pay, for projected savings of approximately $250,000 in East Chicago and $102,217 in Gary this year.
“We thought it would be better to implement furlough days,” Gary City Controller Celita Green said. “It would reduce pay, but employees would still be working and employed, and we would not be contributing as much to the unemployment in the city.”
The days and policies vary between the municipalities.
East Chicago will require employees, except police and fire officials, to take 12 days this year if the furloughs are instituted for the entire year.
Gary is requiring 10 days this year, but employees making less than $40,000, some elected official departments and public safety are exempted, according to Green.
Gary’s furloughs are a carryover from when the city requested the Distressed Unit Appeals Board allow the city to collect more property taxes than tax caps initially allowed from 2009 to 2011.
At the time, a consultant had recommended when Gary went to the state agency to either institute layoffs or furlough days. However, the city had laid off more than 400 employees, and it was becoming difficult to provide necessary services and contributing to a large amount of unemployment in the city, Green said.
In East Chicago, the policy is under review as spending in the city goes down, and the city works to wean itself from relying on gaming revenue, said Jim Bennett, the city’s financial consultant. Unlike Gary, where the City Council approved the furloughs as part of the 2013 budget, East Chicago implements furloughs by executive order, Bennett said.
In 2012, East Chicago saved approximately $300,000 by requiring 12 furlough days, but the amount this year is expected to be less because the city has lowered staffing through buyouts and attrition.
Gary also will save less this year through furloughs. In 2012, the city saved $233,440 from 10 furlough days, but the requirements to take the days impacted more employees, only exempting those making $20,000 or less, public safety or certain grant-based employees, Green said.
The policy was altered because employees had not received raises since 2005 and cost of living increases, Green said.
Both years the city also required employees making more than $50,000 to take an additional 4 percent reduction in payroll for around $69,000 in savings.
Merrillville had instituted furloughs for employees but has since lifted the restrictions, Merrillville Clerk-Treasurer Eugene Guernsey said.
“We did a furlough a couple of years ago because funds were short, but since then, we’ve been cutting every year and stuff like that. So far we’ve been within our budget,” Guernsey said.
Instituting the furloughs had mixed reaction, Guernsey recalled.
“When they realized everybody had to take a furlough and lose a little bit of pay, it kind of opened their eyes a little bit,” Guernsey said.