Here we go again — at the first sign of recovery from the worst recession since the Great Depression, government officials are gearing up to line their pockets with taxpayer money.
The Burbank City Council took the lead last week by granting 100 department heads, managers and other non-union employees raises of up to 5%.
They even voted to give themselves 5% raises, but Councilman Gary Bric had a change of heart just before midnight near the end of a six-hour meeting, saying that “there are a lot of other people that are more deserving of that than we are.”
It wasn’t clear whether he meant city workers or the populace in general.
The justification for the pay raises put forth by interim City Manager Ken Pulskamp was that staff surveyed other cities in the region and determined that executive salaries in Burbank were 11% below the market average.
Ignoring individual merit and differences in actual responsibilities, training and experience of employees, the argument presented to the council was carefully sculpted to justify the raises because it’s in the “public’s interest” to have “motivated” managers and to keep the city “competitive.”
In fairness, it has been several years since these workers got raises and they started having to pay a fraction of their pension costs two years ago, an amount that doubled last year and doubles again, now, to 4% of their wages.
Yet, there is a lot that ought to be troubling about this.
Let’s start by noting it was this “competitive” argument that got local and state government in so much financial trouble during the last 20 years.
The real competition wasn’t to retain employees. It was the pressure on politicians from the unions that helped elect them, pressure to keep up with the public employee Joneses — a spiraling competition that escalates employee costs to the point that Burbank spends 80% of its General Fund on payroll and benefit costs.
One city gave cops and firefighters 90% pensions and then, like lemmings, everybody else followed suit. Same with accelerating pensions for civilian workers so they could retire at 55 with three-quarters of their highest salary.
Then there’s the competition to keep up with other cities by expanding health and other benefits, as Burbank did last week, including allowing the employees getting these raises to cash out unused sick leave and vacation time up to 250 hours a year, a 10% increase.
With a public hearing on the city budget coming up June 4, it might be worth taking note that General Fund revenue to pay for most public services is expected to increase less than 1% next year. And just a week before granting these raises, officials had to discuss ways of cutting $2.5 million — or 2% — from the budget.
Apart from setting a precedent that other Burbank employees, and employees of other cities, will surely take as a sign that the taxpayer money machine is flowing again, the really disturbing thing about this is the way it was sold to the City Council and the public.
“Burbank employee raises to save city money via higher pension contributions,” declared the headline in the Burbank Leader last week, capturing exactly the point city officials made by twisted logic in the staff report.
“The city will realize a total savings of $399,835 between FY 2011-12 and FY 2013-14, even with the proposed salary increase,” the report said, thanks to the increase in employee pension contributions.
Of course, that claim ignores the fact that employees were made to contribute to their pensions for the first time two years ago and the savings were already counted toward keeping the budget balanced. The raise effectively compensates them for their contributions.
In other words, they are wiping out the progress that was made to reduce runaway costs that have put some cities crashing into bankruptcy, the same runaway costs that have many others teetering on the brink.
Burbank is not one of those cities. It has a healthy economy, strong tax base and a low poverty rate, but it also is raising fees for public services and rates on utilities while staring at a $252-million unfunded pension liability for its workers.
At a time when the recovery is fragile, when so many in the private sector are losing their jobs and facing low salaries and benefits, when major structural economic changes are occurring — especially in the entertainment industry that is part of Burbank’s economic base — officials should think twice about granting pay raises.
This is a time for prudence, not irrational exuberance. Happy days are not here again, not yet.
RON KAYE can be reached at email@example.com. Share your thoughts and stories with him.