Local government and its ancillary agencies have had to play a delicate balancing game in determining employee compensation since the bottom fell out of the national economy five years ago. Unlike state government, which adopted an austerity policy with six unpaid furlough days last year, no general pay raises the last two years and none planned the next two years, city and county leaders have looked for ways to reward their workers even though state cutbacks have taken a toll on revenue from occupational and other taxes.
The City Commission has vacillated. An unexpected resurgence of the budgetary surplus emboldened members last year to upgrade the 1 percent across-the-board raise awarded in July to 2 percent in January. But generosity has its limits. Heading off a budgetary deficit, the commission included no across-the-board pay raises for city workers in the recently approved 2012-2013 budget. Moreover, it raised the occupational tax rate from 1.75 percent to 1.95 percent, meaning others employed in Frankfort – including state workers, who comprise the community’s biggest single workforce – will take home even less money.
The city gave its own employees a boost by reinstating a modified version of the old “longevity” pay increases they received as an incentive for staying with municipal government. The previous commission had voted to phase out that benefit, which once paid loyal staffers 3 percent raises every three years in addition to any broader increases. It’s now been pulled out of the trash bin and reincarnated to pay 1 percent increases every three years, subject to future revision.
Fiscal Court decided its best option for county workers was to grant an across-the-board $500 increase, which is proportionally higher for those earning lower wages, who generally find themselves in a tighter bind than their better-compensated co-workers.
The Franklin County Board of Education budgeted no raises for teachers and other staff for the 2012-2013 school year but teachers can take consolation from the “step” increases they still receive automatically as they gain seniority and training.
Last week, the Frankfort Plant Board temporarily considered setting a higher standard when Interim General Manager Herbbie Bannister proposed a 2.3 percent cost-of-living adjustment in addition to designating 1 percent of the total payroll for merit raises based on performance evaluations. Board member Scott Green wanted to follow the county’s example and give everyone a $500 boost on the year, but another member, Patricia Lynch, was skeptical. As she explained, “Somebody hired last week is going to get the same raise as somebody who’s given 30 years ... and I don’t find that equitable.” The Plant Board, which operates the municipal utility established by state law in 1943, grapples with the same dilemma as the City Commission, which appoints the utility board. Even in a sluggish economy, government fears employees who feel unappreciated will look for opportunities elsewhere. A report from the Kentucky Municipal Utilities Association shows public utilities raising pay 2-3 percent in fiscal 2013.
The board finally settled on a 1 percent cost-of-living adjustment along with 1 percent merit raises. The interim manager said he was pleased and predicted staff members will have a “positive outlook.”
Whether workers in state government and private enterprise can identify is another question. Those who see tax and utility rates on the rise while their own income languishes may have some difficulty sharing in local government’s upbeat mood.