The Phoenix

Pay hikes will not trigger tax increase

- By Michael P. Rellahan

WEST CHESTER » Increasing property taxes has long been the “third rail” of politics in Chester County, something the county commission­ers are loathed to touch even in the most prosperous of times — let alone when the state and nation are still recovering from pandemic-related economic turmoil.

So when the three commission­ers reviewed a proposal for a county-wide upgrade of employee compensati­on, among the central questions they wanted to be answered was how the pay raises would be paid for. And the answer was — to quote a one-time presidenti­al candidate — “no new taxes.”

The salary increases and pay grade adjustment­s that the commission­ers unanimousl­y approved earlier this month will not see any rise in the tax rate paid by those who own property taxes in the county in the 2023 budget, said Julie Bookheimer, the county’s chief financial officer.

“It always weighs on your mind but we don’t believe we have to do anything like that,” said commission­ers Chairwoman Marian Moskowitz during a briefing on the compensati­on plan. “I think the point

is that we have a responsibi­lity to our taxpayers to make sure we are containing spending and watching the numbers. Our job is to control it as best we can. We are not going to do anything with taxes. Julie has worked her magic.”

The compensati­on plan announced to the county’s 2,450 full- and part-time employees will increase the salaries of all of the county’s non-union workers, from correction­s officers to clerks in district courts to county librarians to emergency call takers and dispatcher­s.

The vote came after a massive study of the county’s pay system by officials in the Human Resources Office and its Finance Department that verified what had been suggested for months, if not longer: that the county was bleeding members of its workforce by the dozens and was in danger of not being able to staff vital positions, including correction­s officers at the Chester County Prison and deputy sheriffs in the county Justice Center.

The new system will mean salary increases of at least 3 percent for all those employees who are not in bargaining units, estimated at about 2,100 workers, according to county staff. Those who bargain collective­ly with the county will see their salaries reviewed separately, officials said. The cost to the county of the upgrade will be $7.4 million, about $5.6 million of which will be counted in this year’s $688 million budget.

“It is expensive, but it is necessary,” said one county official when asked about the move.

The last reorganiza­tion of positions, pay grades, and annual salaries came 20 years ago, when the state of the economy in the county, state and nation was much different than it is today.

At the pre-vote briefing, Bookheimer said that the pay increases put in place for the coming nine months will be paid for mostly with federal American Rescue Plan Act funds. The program, from which the county has been given a total of $102 million over two years, allows local government­s to use the money for salaries, as long as it does not go to debt or to pensions.

Bookheimer said that the county will use about $3.6 million in ARPA funds for the salary increase. The remainder would come from what funds the county had previously budgeted for normal pay raises, usually given in April. The average pay raise over the period from 2010 to 2021 was 1.9 percent, with no raise in 2020 because of the COVID shutdown. But it has been 20 years since the county has adjusted the overall pay grades and compensati­on rates for its employees.

“What we plan to do over the next several years is continue to build the budget each year to cover this increase,” Bookheimer said. “So by 2025, the whole increase of this compensati­on study will be covered.”

In her comments during the commission­ers’ briefing on the subject, Commission­er Michelle Kichline, the board’s lone Republican, stressed that a tax increase was not on her horizon for the issue. The last increase came last year, with a modest 1.8 mill hike. The average tax bill in the county is an estimated $768.57.

“I think that if I do vote for this it is very important for the budgeting that it would not impact our taxpayers,” or the county’s AAA bond rating, she said, echoing Moskowitz’s perspectiv­e.

Commission­ers Vice Chairman Josh Maxwell, in discussing his thoughts on the importance of the move, said that not only was the economics of how to pay for the pay increase important but the message that it sends to employees and residents alike.

“I am interested in what is in the long-term needs of the health of the county,” he said. “We want to make sure that we have employees — that we are recruiting employees and are able to retain them long-term — to provide top-tier services to our citizens in a way that they deserve. It is important that we set a culture in this government both inside and out that we respect people’s work and that we will be there to take care of them.

Overall, said Kichline, the longest-serving member of the board, the increase ensures that the county can continue to provide public services that make the county a desirable place to live, work, and do business. By working to keep its workforce intact and stop the turnover, she said it was time to upgrade employee compensati­on.

“If we don’t have the employees to do that it’ll have a significan­t impact on the quality of life in this county,” she said. “If we don’t have the employees to maintain our infrastruc­ture, from (the emergency) 9-1-1 system to parks, that will impact whether we retain businesses, whether people continue to move here, whether people want to retire here.

“It’s all connected,” she said. “It’s synergy.”

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