KEN KREFFT
Contributing Columnist
Mayor Adrian Perkins, flanked by three city council members -- Tabatha Taylor, James Green and Jerry Bowman Jr. – made an announcement at a press conference on Friday, Dec. 17, to grant all Shreveport city employees a 13% pay increase.
An earlier proposal for a 13% pay hike for first responders failed on a 3-3 vote at the Dec. 14 city council meeting. This new proposal bears review.
The big dog for our general fund revenues is the 2.75% city sales tax. In 11 months, it has already exceeded all of 2020, and will beat last year's total collections by about $19 million. However, it is difficult to control credits like the sales tax.
There are so many factors in play. Inflation, Covid and the economy are three major items to consider. On the other hand, debits, like employees' salaries with their associated group health care and retirement costs, are only manageable to a limited degree. A freeze order by a mayor or a CAO can reduce greatly the general funds expended. This happened as recently as last year when we also had voluntary furloughs.
Approaching a new budget year with this 13% salary increase for the entire full-time city workforce likely can't be sustained without substantial subsidy from the operating reserve fund.
The city already absorbed the whole group health-care loss of $5.4 million. Adding 13% pay raises for all the employees further strains the general fund's operating budget reserve.
That, in turn, will make it quite difficult to improve our municipal bond rating. This will then cost taxpayers big bucks when we market the roughly $70 million of general obligation bonds as a result of a successful 59.2% "Aye" vote for Proposition 1 at the Dec. 11 citywide election.
My recommendation is a more affordable 9-10% pay hike for non-public safety workers. City voters approved the police/fire proposition 3:2, fractionally. Yet the same voters rejected parks and recreation's Proposition 5 by a similar 3:2 margin. The voters, very simply stated, did not support four of five ballot issues.
Therefore, the mayor and the city council should support police and fire to a higher level than other employees.