At a discussion of the Select Board and School Committee on Tuesday, the co-chair of the Finance Committee noted that the override amount from last year will only cover the differential between the rates of growth of expenditure and revenue for one year. We are now into that year, FY09. In FY10, the town will again find itself short on funds barring cutbacks which include layoff of employees. Back in February, I posted here on why this is occurring. Some steps are underway to reduce the rate of growth of expenditure, such as encouraging employees to switch to less expensive health care plans, that are now bearing fruit but other steps are needed to slow the rate of growth of expenditure. That raises the question of how to continue town services at the present level. What was proposed was ...
.. a one year hiatus from Cost of Living Adjustments (COLAs) for town and school employees. The savings from such a pay freeze are significant. The school department alone would realize nearly a $1 million dollar reduction in their costs. Similarly, the town would see somewhere around a $700K reduction. The net effect on the budget of not having these increased salaries is virtually the same amount provided to the budget bottom line by creating the Solid Waste Enterprise ($1.8 million) or the Prop 2-1/2 override amount last year($1.5 million). Just as the Solid Waste Enterprise and the override amount are continuing contributions to the budget shortfalls, a pay freeze has a similar effect. If the town reduces the increase of salaries in FY10 by $1.7 million, that amount is not rolled up into the following year or the years after. The amount will even compound similar to the override amount since the savings the following year will be some percentage greater since a COLA will not be applied.
I believe deep cuts of services and layoff of employees will be needed without further action to reduce the rate of growth of expenditure. Some of the necessary actions will require time to implement but we don't have the luxury of reserves. The timing of the layoffs will come before the reductions take effect. One way to avoid those cuts and layoffs is to freeze town salaries for one year.
When I ran for the Select Board, I said that the solution to Dartmouth's fiscal woes would require sacrifice from everyone involved, taxpayers, employees, general government and schools. The taxpayers have voted to increase their contribution via the override in April, property owners are paying fees for trash removal, parents and students are paying fees for school busing and programs, might FY10 be the time for town and school employees to shoulder some of the burden? Leave your thoughts in comments.
Thursday, August 21, 2008
Town COLA freeze
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21 comments:
Won't it be difficult to do this with unions involved?
Does anyone know what Ana Riley's salary has been negotiated at?
The majority of current contracts with town and school unions are set to expire together on June 30, 2009. The town is negotiating with other unions now and hopes to get the same end date for those contracts as well. The result is that most union contracts would be up at the same time. The town and schools could offer similar terms to all represented employees at that time. As I said, our revenues are going to be less than our expenditures for some time into the future. Given that scenario, the only way to balance the budget is to pass overrides or cut expenses. The amount of expenditure reduction required, if COLAs in excess of our revenue increases are given, will probably mean that workers will be laid off.
If you follow the links in this post to my previous posting, I explain why all these things, overrides, spending cuts or pay freezes, are temporary solutions until our expenditure growth and revenue growth are reconciled. That reconciliation is the only long term solution.
Some ideas I have for reducing the rate of growth of expenditures can be found here and here
Given the current state of the economy, I would think that the unions would want to compromise, esp. if the end result might be layoffs. While I respect unions, at the end of the day, the contract should reflect some 'give and take' on both sides. No one wants to see layoffs, but are all the teachers willing to take a freeze so that it doesn't happen? I guess we will have to wait and see.
Past history says no. They will accept layoffs of the junior members just like last time. The unions are out for the rank and file only as they should be since no one else is. Ana Riley's salary is 108,000, about 10,000 less than her predecessor. The school dept reduced expenses by accepting less experience in exchange for a lower starting wage.
So she makes the same as donna dimery...I thought they were firing the athletic director, who makes too much and has made bad decisions. That's right let him stay til retirement, save everyone's bum.
3% is peanuts in today's world. Classroom workers should get a cola, people directly helping students but get rid of Manny and Steve, they are lousy workers.
There should be no increases for anyone. Greg L. of the FinCom stated that if there had been pay freezes last year the schools could have had both textbooks/technology and opened both schools. Everyone respects the work teachers do but they refused to take a pay freeze last year. As you stated "3% is peanuts" so why not give it up to help the children they claim to care so much about???
Anon 10:35 - I can attest to the fact that the teachers that have worked with both my kids do more than 'claim to care about' their charges. Your point about taking a pay freeze can be made without gratuitous slams against teachers, the majority of who do in fact care very much for their students.
yes they wold have text/tech to some extent andre-openedthe schools only to have to re-close them this year and if "Everyone respects the work teachers do" they would be calling for 1 or 2% instead instead of Zero. by reducing the increase improvements could be made
Anonymous, 8:00: Okay, that's compromising and a good start. The unions weigh in heavily here, though. We can all offer our opinions, but we are not sitting at the bargaining table.
You have missed an important point which is that the savings continue in future years. By freezing salaries one year, expenditures are reduced in future years as well. If $1 million dollars is not given this year, the following year that same amount is available again and so on into the future. This is true even when salary increases resume because the one year increase is permanently missing from the baseline.
Three percent increases are not peanuts to the town. Each percentage of increase in the teacher's contract is worth about $300K. On the town side, each percentage is about $200K. So the difference between 2% and 3% town-wide is $500K. The difference between 0% and 3% is $1.5 million.
Thanks Bill. That sure sounds like a lot of money the schools and town could use. I can't understand why people wouldn't be pushing for this instead of defending pay raises.
A town-sponsored salary analysis has found that employees' salaries are comparable with the wages received by workers in similar positions both locally and in other similar communities around the state.
This analysis should (but won't) take the wind out of the sails of those who want to strip pay and benefits from town employees.
Read the full Standard-Times article at http://www.southcoasttoday.com/apps/pbcs.dll/article?AID=/20080826/NEWS/808260317.
You're right lifelong townie - here will be some that state the comparable towns are not in fact comparable, the survey was too small, too big, biased, we can't compare to any other town we need to look at the private sector etc...
INstead of acknowledging that salaries are not crazy and moving forward, the distraction will continue to be 'we pay too much'. This is at least the 3rd survey that says basically the same thing in the past 2 years. Have'nt we wasted enough time beating this aspect of our town finances to death?
Those people wont stop until they get three nickels out of YOUR dime not theirs. Their dime is squirreled away under the mattress somewhere. You would think they could take it with them when they go.
This survey is a joke. Fringe benefits were not included. Why not??? They cost the town money don't they? How can this report be taken seriously when all the information was not included?
Oh yeah. I'm sure that town employees enjoy a surfeit of fringe benefits. Can someone tell me what these fringe benefits are?
Town employees receive 15 sick days per year, they get a pension that pays up to 80% of their salary (depending on their length of service), they get a bonus for not taking sick days and then are paid for the sick time accumulated when they leave, they get up to 6 weeks vacation (4 weeks after 10 years service), they get a longevity bonus just for staying on the payroll, they get 3 personal days, 3-4 days bereavement leave, the town pays 50% of their health insurance, both while they are employed and after they retire, and tuition reimbursement.
Hey there Poor Policy
Thanks for answering my question. I wonder if the salary figures for the other towns included (good)fringe benefits?
Je ne sais pas au juste.
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