The perks your tax dollars pay for

BY SANDRA PEDDIE | sandra.peddie@newsday.com

11:30 PM EST, January 1, 2008

For years, the Plainview water district -- like many other special districts across Long Island -- has offered free dental insurance that paid for the braces for children of employees as well as for part-time commissioners as part of its benefits package.

Read more: The story so far

Last year, the board of commissioners that manages the district made a small change in the package. After one commissioner's wife got braces, the board voted unanimously to expand the benefit retroactively so that spouses also could get orthodontic coverage, records reviewed by Newsday show.

Marsha Shulroff, 69, the wife of Plainview commissioner Edward Shulroff, got the braces "rather than going around looking like a picket fence," her husband said in an interview. Two other employees also received the benefit -- Shulroff's daughter and grandson, according to interviews. He said the change in policy "wasn't anything special." Records show that the district pays about $20,000 a year per employee for the medical and dental benefits package.

Among special districts on Long Island, it wasn't anything special. A Newsday review of financial statements, payrolls and other records from independent special districts shows that a select group of public officials has reaped a bonanza in taxpayer-funded benefits -- on top of annual salaries -- that go far beyond the generous benefits given to state and county employees. They range from free Medi-Gap insurance to benefits offered to part-time consultants and commissioners.

And, upon retirement, many of those officials -- and their spouses -- will be eligible for those free benefits for life.

Edward Shulroff said the dental insurance was "open to everyone at the district" except part-time employees. While state, county and town budgets typically are reviewed publicly, the costs of special districts -- the little known taxing entities that provide services ranging from garbage pickup to water hookups and park maintenance -- have all but flown under the radar. Anyone who wants to examine a special district budget can find it within the budget of the town the district is a part of.

Yet, despite increased scrutiny recently from county and state officials, the districts -- which receive $500 million yearly from taxpayers -- enjoy a special independence under the law. They are not required to report to the state comptroller and provide only limited information to town governments. And, according to a 2005 report issued by then-state Comptroller Alan Hevesi, there are no legal limits on the fringe benefits district commissioners may give to themselves and nonunion employees. State Comptroller Thomas DiNapoli's office didn't return a call for comment about health benefits in special districts.

"It's a cash cow for people who essentially owe their loyalty to a political party," said Seth Bykofsky, a longtime community activist from West Hempstead, referring to district commissioners' typically close ties to local political parties.

Political connections

Critics say that special districts have long been bastions of political patronage, providing a steady supply of workers at campaign time. District defenders argue that there's nothing wrong with being politically active.

Marsha Shulroff, long active in the Democratic Party, works as a clerk at the Nassau Board of Elections and earned $82,126 in 2006, according to payroll records. She said she gets health benefits through her job, but that braces aren't covered by the county. The Plainview water district pays up to $3,000 for each set of braces, according to records.

Edward Shulroff also has a full-time job, as deputy tax receiver for the Town of Oyster Bay, in which he earned $85,300 in 2006, according to payroll records. Although he is entitled to health benefits through that job, he instead takes a buyback, or payment in lieu of benefits -- a benefit rarely, if ever, offered in the private sector, according to experts. For someone eligible for family coverage, the buyback is $6,000, according to town finance officials.

As a water commissioner, Shulroff receives $100 per diem for attending board and dinner meetings, reviewing paperwork and other district work. Last year, according to the district payroll, Shulroff earned $20,340 in per-diem payments.

The records show that most commissioners at special districts have availed themselves not only of free medical, dental and vision benefits, but other unusual benefits as well. For example, the Hicksville water district provides free cancer coverage and Medi-Gap insurance, which pays for items not covered by Medicare. The Franklin Square water district gives excess insurance to cover the cost of deductibles -- a practice deemed inappropriate by the Nassau County comptroller in an audit. And several sanitation, sewer and water districts give their consulting attorneys, who typically work only a few hours a week for the districts, the same fully paid health benefits as full-time employees.

"This is a scandalous waste of money," said E.J. McMahon, director of the Empire Center for New York State Policy, a conservative think tank in Albany. "It can't be justified on any grounds."

James Parrot, chief economist for the Fiscal Policy Institute, a research institute in Manhattan, disagreed. "There's a larger question here as to what workers in this society should be entitled to or not," he said. "I think that workers in this society should have good health and other fringe benefits."

In the private sector, such added benefits are virtually unknown, as workers are spending more for less health care coverage or are unable to secure coverage at all, according to researchers. "The cost pressures are forcing, in particular, smaller firms to stop offering coverage," said Sara Collins, an economist at the Program on the Future of Health Insurance, a nonprofit research foundation in Manhattan. "The other pressure is that all firms are trying to find ways to share more of their costs with their employees."

Costs skyrocket

No one has tallied the total cost of health benefits paid by special districts, or the future obligations that will come as officials retire. But a Newsday analysis of annual financial statements obtained through the Freedom of Information Law from independent districts, other than fire districts, shows that the cost of employee benefits has nearly doubled in many districts since 2001.