Paying our bills, and extras

You can craft a budget by starting with the money you expect to have in the coming year and determining how to spend it. Or you can envision the lifestyle you want and figure out how to afford it.

Chapel Hill’s budget for Fiscal Year 2018, which starts July 1 of this year, does a little of both.

One way or another, all of the money we have to spend comes from taxpayers, through property taxes and sales taxes; fees, such as for stormwater management and solid waste; a parking rate increase; and bonds that voters have approved. Visitors pay a hotel occupancy tax to the county, which divvies it up with the town.

Although the town’s recommended tax rate has gone down this year, most of us will pay a higher tax bill because the county increased the value of our residences. Commercial property values have risen even more steeply and are passed along to businesses renting space in commercial venues, so the pressure is on for local business owners to increase their sales.

This year, town employee health insurance costs increased by 12%. The town’s Employee Wellness Program keeps the premiums from going even higher. The budget puts money aside to pay for health-care coverage and pensions we promised to retired town employees, the much-discussed OPEB (Other Post-Employment Benefits) liability.

At council’s request, the town manager has included a 2% increase in the amount of funding for human services agencies. The nonprofits the town contributes to provide services that not only improve the quality of life for our most economically fragile residents but also divert residents from unaffordable situations — for instance, offering in-home support services so seniors can age in their own homes, rather than pay for an expensive assisted living facility.

The manager also shifted funds to boost the affordable housing pot to more than $1 million.

The budget includes money to replace worn-out buses with more fuel-efficient models and to rent an electric bus as a mini pilot program. The manager has designated funds to pay for a rewrite of the Land Use Management Ordinance to address the high-density development we face today.

A problematic cost comes in the manager’s recommendation of a 2.5% pay raise across the board, which increases the wealth gap by greatly benefiting those at the top end of the pay scale and minimally benefiting those at the lower end. More than 50 job categories pay between $100,000 and $200,000. I have advocated that those employees receive a $1,000 bonus instead of a percentage increase.

Council members who support an across-the-board percentage increase say that higher-paid workers will feel disrespected if they get a lower proportional pay hike and may leave. From my observation of private-sector businesses, money won’t keep a restless employee in his job. He’ll take the pay increase and keep looking for a more interesting, challenging position.

Perhaps that’s a good thing. Don’t we want to make room for employees who are excited about the work they do, rather than feel shackled by golden handcuffs?

We have many projects to invest in that would benefit town residents and visitors of all income levels. We don’t need to divert funds to feed systemic inequality.
— Nancy Oates

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3 Comments

  1. Terri

     /  June 12, 2017

    I served on the OWASA board for 6 years and for 5 of those years I argued that a flat rate for employee performance increases was the most democratic approach. At the common 2% award, someone earning $100K a year, would get a $2,000 annual salary increase. Someone earning $35K would get $700. Another way to look at this is that 3 employees at the lower salary rate earn the same as 1 employee at the higher rate. We could have paid a $1,500 flat rate to everyone for the same budget as we paid the percentage rate. But even that slightly less increase was enough to cause the traditionalist to claim injustice for the higher income workers.

    Is good performance really dependent on original salary or is good performance good performance? I believe it should rewarded equitably.

    The first couple of years, I argued alone but slowly others began to join me. We never reached a majority but came very close. I hope at least a couple of those board members who are still serving will continue the fight for economic justice.

  2. Bonnie Hauser

     /  June 12, 2017

    There are broader questions – one is whether people are being paid competitively – and does their salary keep up with inflation.

    The rewards for public service jobs are not money – but people deserve to be paid for their contribution and experience. Salary compression can create serious problems for morale.

    IMO, the wealth gap is not between people making $150,000 or $40,000. Its people making millions on the backs of low wage employees. That’s not a problem here.

    Here’s UNC’s comparison of county salaries 2017. Is there a similar benchmark for towns?
    https://www.sog.unc.edu/publications/reports/county-salaries-north-carolina-2017

  3. plurimus

     /  June 13, 2017

    First, there is a “market rate” for most jobs. Raises should not go on forever in the same job unless market forces drive it up. Promotions should increase salary with responsibility. Salary should also be considered in the context of other benefits and perks such as heath care, savings/investment matches and education reimbursement. Total compensation is the yardstick.

    Second, salary is not for rewarding performance bonus payments are. Bonus should be reward for above and beyond commitment and accomplishment in a given fiscal year and in my opinion be team based.

    As far as CEO and executive pay Bonnie is bang on. The amounts paid to Execs while simultaneously giving them government funded welfare such as deferred income, reduced taxes on options, indemnifying them legally from questionable decisions and other financial candy is disgraceful and harmful to our society at every level.

    Third democratic approaches do not work. It isn’t a popularity contest. Corporations are not democracies, trying to run them as such shows a lack of adequate ownership and leadership.

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