Pay Raises Raise Questions

The first reaction to the Memphis City Council’s vote in favor of a three per cent pay raise for its employees is disbelief.

On the surface, it appears that a majority of the Council is more concerned about employees than taxpayers. Below the surface, it was yet another reminder of the special importance that government has to the African-American middle class in our city.

In the end, we understand those dynamics, but it does little to temper our incredulity that in a year of disastrous budget challenges, with billions being shipped to local governments to stimulate the national economy and with jobs cuts are the norm, $11 million was used to boost city employees’ salaries.

One-Time Hit

We’ve written until most of your mouths move when we start talking about this, but it remains nonetheless true: the Memphis property tax rate must be reduced so that Memphis is on a level playing field with suburban municipalities. If a majority of Council members believe that city government has $11 million to spare, we’d suggest that it should be used to reduce the tax rate about a dime.

Alternately, City Council should have treated the three percent raise was a one-time bonus, so that it would not be an ongoing cost in future city budgets.
A one-time bonus would not de facto increase the personnel budget for next year, and even if City Council voted for raises next year, they would be based on the salary levels of last year without the three per cent increase.

Coupled with last year’s courageous, then disappointing, vote on school funding – when $40 million of the cut was moved to general city government operations – means that City Council has missed crucial chances to decrease the tax rate by about 50 cents.

Mixed Messages

As a result, City Council is sending mixed messages. On one hand, it’s cutting school funding in the interest of tax equity, but on the other hand, it’s not following through by slashing the city’s tax rate.

It’s Step 2 that matters most. Otherwise, as was shown last year, city taxpayers get a token reduction and the bulk of the money ends up feeding the broken business model that is city government.

And yes, we know that before their 5 per cent pay raises were given last year, city employees hadn’t received a pay raise in two years. But the economic downturn is forcing hard decisions on everyone, and there’s no reason that government is exempt from the realism that private sector Memphis workers are confronting every day, particularly the 33 per cent of them who are not now working.

Unfulfilled Promise

This year’s budget hearings began with such promise, but deteriorated into some grand-standing that is always expected with such a process and the racial divide that we hoped had finally passed.

The final vote on the three per cent said it all: only one white Councilman and one African-American Councilman abandoned their racial voting bloc. As usual, there was the seemingly inevitable black and white discord that accompanies most major public decisions here.

Hopefully, the residual effect of the budget wars will quickly recede, but suspicions seem to be growing with some members suspecting others with using the process to position themselves for higher office and with some convinced that other members are mired in the past.

Deepest Cut Of All

It would make for a challenging group therapy session, but despite the conflict of the hearings, a vast majority of the Council members profess a desire to mend fences and repair relationships. It can’t happen too soon, because with the economic realities and the regressive tax structure defining city government’s options, budget hearings will otherwise become more and more rancorous as this yearly drama plays out.

If the public questions the wisdom of the three per cent raise, they are absolutely bewildered by the reluctance of local government to reduce their workforce. We’ve seen juries return death sentence verdicts easier than local legislators faced with the idea of paring back the “personnel complement.”

It’s manifested in the attitude by some Council members and county commissioners that workers should be protected at all costs. There’s almost the sense that employees have a right to be employed and that the financial implications on the public are almost irrelevant.

The Promised Land

There’s normally a racial divide that opens on this question that has more to do with history than finances. For decades, government has been the promised land for the African-American middle class.

That’s why any time suggestions are made that workforce of city schools, city government and county government should be cut back, there is a howl of protest. That’s because in a large part of this city, this is more than attack on government spending. It is in fact an attack on the black middle class.

Of the 22 largest employers in Shelby County, 11 are public entities with about 75,000 workers. It’s a safe bet that at least half of them – in government and schools, it’s more like 65 per cent – are African-Americans.

All of this is why an issue like residency tend to explode in ways that perplex the white colleagues of black legislators with its emotions and hostility. And yet, as the local tax structure restricts city government’s ability to fund its services, it may in time erase any racial sensitivity about the size of the workforce and any idea that the workers deserve raises no matter what their performance.