Local Government Pay Hikes Gouge Taxpayers

~~~A Commentary by Maureen Bader~~~

Wyoming Liberty Group

Government budget time at both the City of Cheyenne and Laramie County show just what their priority is - pay hikes for government workers. City and county councilors sure are generous with other peoples' money!

The City's pay hike proposal would cost taxpayers about $615,000 and the County's about $1.7 million. These proposals come with some controversy. The Cheyenne City council's 2014 budget was rejected primarily because of a disagreement on the form of the employee pay hike. The County budget pay hike priority only came to light after the information was leaked by a concerned county councilor.

Forgotten in the discussion is where the money comes from to pay for local government - taxpaying Wyoming families.

For the City of Cheyenne, the largest single revenue source comes from the state sales tax, but at least families can control how much they spend to avoid paying more sales tax. A more direct attack on the wallets of taxpaying families is garbage collection. Sanitation removal has long been used as a cash cow to fund poorly managed city services.

According to the City's budget, sanitation removal fees took $6.3 million out of the pockets of Wyoming families in fiscal year 2012-2013. This will go up to $6.5 million in next year because of the now approved 3.4 percent increase in trash collection fees that will extract another $215,000 from family budgets.

In fiscal year 2012-2013, sanitation removal costs ran about $3.3 million, so fees generated a $3.0 million profit for the City. Higher personnel costs are expected to increase the sanitation budget $3.5 million next year. In other words, homeowners and renters are overpaying nearly $3 million every year for garbage pickup and will soon be paying even more to fund increased salaries and benefits for sanitation employees.

Salaries and benefits are the largest component in the City's budget. The 2014 budget is set at about $55 million. Approximately $38 million - 70 percent - is salaries and benefits.

The City is currently engaging in a curiously skewed "employee investment study," which appears suspiciously to be window dressing to justify the pay hike. Whether to bestow raises to employees who are "below market" or alternatively to grant an across-the-board, cost-of-living increase seemed to be the council's sticking point.

In any case, the survey will no doubt show employee salaries below "market" because the employee survey does not include benefits, and these can add an additional 50 percent to the cost of an employee.

For example, sanitation employee salary costs totaled $1.9 million in 2013. Benefit costs totaled $1.1 million. According to the 2014 budget, salary costs would go up to $2.06 million, an 8.4 percent increase. Benefit costs would go up to $1.14 million, a 3.6 percent increase.

Leaving benefits out of the calculation conveniently results in a massive understatement of the value of a government salary. Government benefits are often gold-plated compared to what private sector workers, the ones who pay for government worker benefits, receive.

For example, fulltime City employees are included in the State pension plan. This plan provides retirement benefits few people in the private sector should even bother dreaming about.

Worse still, City employees contribute very little to their gold-plated plan. Total contributions equal 14.12 percent of the employee's salary. The City is required by State statute to contribute 7.12 percent of the amount, leaving 7 percent for the employee to pay. However, the City also pays 3 percent of the required employee's contribution, leaving the employee to cover just 4 percent. In the sanitation department, this cost taxpayers about $191,000.

Government employees get subsidized health insurance as well. City employees pay a mere 12.5 percent of the cost of the insurance premium, leaving the remaining 87.5 percent for the taxpayer to pick up. In the sanitation department, this costs about $650,000.

People working in the private sector who may not even have a pension or health insurance are forced to fund gold-plated benefits for someone else.

For some reason, the only option to pay for these higher salaries seems to be higher taxes and fees. No one seems to be talking about making government more efficient or jettisoning functions that should be provided by the private sector.

City and county councils are not working in the best interest of the citizens who voted them into office. If elected officials are truly representing the people who voted for them, they will either reject the pay hike or find savings in other areas to fund it. Taxpayers cannot afford high-priced help at City Hall.