City raises don’t add up
The city of Santa Fe deserves praise for managing its budget in tough economic times, especially for turning a $15 million deficit into what appears to be a multimillion-dollar surplus. Through judicious cutting, raising parking and other fees, halting most pay increases and other budget discipline, the city has managed to avoid severe layoffs or service cuts. Now, instead of being in the red, the city estimates some $4.5 million in excess revenues.
That’s a credit to Mayor Javier Gonzales, the City Council and most of all, to the paid city staffers who managed the dollars and do the work. Even so, it would be fiscally imprudent to take a projected surplus and spend it on a 5 percent, acrossthe-board raise for city employees. Especially since it appears the raises will cost more than four times the mayor’s original proposal.
The Finance Department originally figured the raises at between $700,000 and $1 million annually, but the true cost will be closer to $4.1 million a year. That error came about because the department was only figuring a 5 percent raise for employees who belong to the American Federation of State, County and Municipal Employees union. Those aren’t all the city’s workers, excluding employees such as police officers and firefighters — the public safety workers whose jobs are dangerous and can be hard to find because of their specialized skills.
The mayor and city staff should rethink this proposal. The state of the economy still is in slow recovery, and actions from Washington, D.C., could upset Santa Fe’s financial bottomline. That might happen from a withholding of federal funds or a repeal of the Affordable Care Act that impacts the state economy, reducing tax revenues even more. Santa Fe cannot afford to commit to recurring expenses until the economy’s uncertainties clear up.
Rather than dedicate millions to recurring raises, the mayor might suggest one-time bonuses. That would reward hard work without committing funds year after year. City officials also should use extra dollars to further city goals and priorities. One goal is recruiting more police officers and retaining the ones we have; they might need pay raises in excess of 5 percent to accomplish that. When money is tight, spend money where it is most needed. Perhaps raises, if they are approved, should be focused on the employees making the least money. When top managers make six figures, they are working hard, but they likely don’t need an increase to pay the bills the way a clerk or a front desk worker might.
Don’t rush this process, either. It is tempting to have salaries in place by July 1, when the new fiscal year begins. But a compensation study is being considered. Approve the study and delay big decisions on salaries until it is completed. Raises can be added later, if finances hold. Besides, the city needs to do a better job of explaining where the surplus is coming from, as well as making clear what is taking place with paying off bonds — designed to free up money in the operating budget. Plans are in the works to retire $15.2 million in bonds, apparently through transfers of some $6 million and finding $9.2 million from other funds. This is not specific enough, especially considering the city’s past issues with moving money from one fund to another to pay bills.
The mayor, in his state of the city speech, had laudable sentiments: “I am proposing that we do right by 1,500 of the hardest working Santa Feans I’ve ever known.” Trouble is, the rest of the city’s taxpayers have to make good on that commitment. And most private sector employees also are paying higher health costs and have not received substantive raises in years, if at all. Unlike public-sector workers, most private-sector employees lack generous retirement benefits or insurance plans. They are often worse off than the public employees their dollars support.
This is not to bash city workers. They have stepped up in tough economic times to take on more tasks, work for less pay and otherwise make sacrifices. They are hardly alone, though. Before the city commits millions to raises it ultimately will not be able to afford, take the time to do the math — correctly.