[SeMissourian.com] Overcast ~ 38°F  
River stage: 14.32 ft. Rising
Saturday, Dec. 20, 2014

Editorial: City budget - Payroll just one factor

Monday, June 3, 2002

Comparing one city's budget to another city's budget can be compared to comparing Florida's fruit and vegetable industry to California's fruit and vegetable industry. Both states grow and sell fruit and vegetables, but they don't necessarily grow the same fruit and vegetables.

And so it is with city government. A budget task force of Cape Girardeau's city employees has been looking at expense and revenue forecasts and has concluded that the city needs a 3/4-cent sales tax increase to generate $6 million for needed budget items. Among those needs, the task force says, is enough money to adequately cover payroll costs plus some raises for city employees.

One way of determining whether or not a city is has competitive pay for its workers is to look at what other cities are paying. That's what Cape Girardeau did in 1996, concluding that municipal workers here were, on average, paid 8 percent less that workers in cities of comparable size.

Recently, the Southeast Missourian made its own survey of city budgets and salaries in cities about the same size as Cape Girardeau. Based on those figures, it appears the 1996 review and the subsequent three-year effort to boost the pay of city workers here was successful. The newspaper's recent comparison found most local salaries to be competitive.

But it was like comparing apples and oranges sometimes -- and plums and cherries and artichokes and rutabagas.

And even though salaries may be comparable today, the plain fact is the salary landscape is changing all the time. Jonesboro, Ark., for example is in the process of raising city salaries in order to be more competitive for the best employees.

What Cape Girardeau learned from its pay-boosting effort in recent years was that once workers' pay is increased, it stays increased. And workers also expect cost-of-living adjustments even after significant catch-up adjustments are made.

As a result, Cape Girardeau's budget has an added $800,000 to $900,000 a year in payroll expense each year because of those adjustments. And when pay is increased, so are other payroll-related components such as insurance costs and retirement benefits -- and future cost-of-living raises.

Payroll is only a portion of the pressure on Cape Girardeau's budget right now. There are capital needs too, and the current city wish list's total price tag far exceeds the $6 million a sales-tax increase is likely to produce.

At the same time the city's budget needs are being weighed, the impact of a sales-tax increase also must be considered. Part of the city's current budget woes are the result of flatter retail sales -- the basis for collecting sales tax -- than expected. Some retailers worry that a higher city sales tax at the same time Missouri officials are asking for sales-tax and fuel-tax increases -- might dampen sales even further.

All of this points to the need for cautious deliberation as the city decided to put the sales-tax issue on the ballot.


Fact Check
See inaccurate information in this story?


Respond to this story

Posting a comment requires free registration. If you already have an account on seMissourian.com or semoball.com, enter your username and password below. Otherwise, click here to register.

Username:

Password:  (Forgot your password?)

Your comments:
Please be respectful of others and try to stay on topic.