Breaking down the proposal for city employee pay raises - Tucson News Now

Breaking down the proposal for city employee pay raises

TUCSON, AZ (Tucson News Now) -

The Tucson City Council has passed a motion to increase pay for all city employees, but how do the numbers add up for a cash-strapped city?

On Tuesday the council approved a pay raise of 55 cents per hour extra for about 5,000 city employees. That means each employee's salary will go up more than $1,000.

It will cost the city $5.1 million dollars to pay the increased pay rates every year.  A task that may prove difficult in the future according to city chief financial officer, Kelly Gottschalk.

For now she says the city can afford to pay increases, not because it has extra money, but because the city isn't paying its debt. 

"Because we're going to now have this debt outstanding longer, the present value cost of doing this is real."

Tack on about $750,000 in interest on the debt, and the costs keep coming. Higher salaries mean the city pays higher pensions.

"We have rising pension costs, we have a tremendous number of police and fire that are in our drop program that we're going to have to fund both their payouts and also pension on those employees who take their places."

Council member Karin Uhlich says employees stuck it out through the hard times, taking furlough days as the city tried to balance the budget, so it's time they see a payoff.  She also says the city is in a healthier position these days to allow these increases. 

Gottschalk agrees the city is doing better financially because tax revenues are up.  However a new bill moving through the state legislature can change the way the city collects sales tax.  If revenues take a dip, then it will get even harder to cover the increased salaries year after year.

"We've made great progress towards that in the last couple of years.  We're still way below where our goal is and the point of having that fund balance is when those unexpected things happen you have something to draw on."

Council member Steve Kozachik did not support the pay increases, saying it will be more money today, but more furloughs tomorrow when the city gets into another debt mess. 

Gottschalk says crisis can be averted if revenues pick up, but they need to pick up quickly.

"More jobs, more economic development, more annexations, all of those help, we're just hoping it helps a little faster than we're seeing right now."

Copyright 2013 Tucson News Now. All rights reserved.

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