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Friday October 31st 2014

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Bonus Question

 

Some City of Pensacola employees—those in the AFSCME union—will receive their Christmas bonuses as part of their regular paycheck. Union leaders and members let the Pensacola City Council know they were unhappy with  the move, which carries certain tax consequences.

“You can do the math, you know, it’s pretty obvious,” said Kimberly Aguiar, president of the local AFSCME Local 3253, after leaving the council meeting.

City Administrator Bill Reynolds told council members that the bonuses were lumped into regular paychecks in an effort to get the money to workers prior to Christmas holidays. He said a deal had only recently been reached with AFSCME, which had delayed the process.

“The only reason that AFSCME didn’t get their bonuses with everyone else is because we didn’t have a written agreement,” Reynolds said.

The city administrator said he was “dismayed” with the union members’ perspective, explaining that the city was attempting to get the money to its employees in the fastest possible way.

Dick Barker, the city’s chief financial officer, said that “it would have a benefit to the employees to be paid in a separate check” but that “it was just a matter of timing.”

Reynolds agreed that there would be some short-term tax consequences.

“There are some minimal tax implications,” he said, adding that the math would shake out once employees filed their returns. “—the taxman is getting it on the short-end, but they’ll get it back on the long-end.”

Aguiar disagreed, arguing that the employees would not see as much financial benefit prior to Christmas—the stated expediency goal—and stood to get bumped into a higher tax bracket due to the bonus.

“Reynolds said he was ‘dismayed’ by what we said,” Aguiar noted after the meeting. “I didn’t hear what he heard.”