Shreveport looks to compound wage hike mistake

Shreveport’s City Council next week will conclude its 2022 budget debate, where the question isn’t whether to deplete its reserves, but whether recklessly so in order to raise how many employees’ pay, including boosting minimum wages to over twice the legal limit.

Last week, the four Democrats and two Republicans (the seventh member still as-yet undetermined after a resignation last month) agreed that no city employee should receive less than $13 an hour. This meant hiking the lowest grade’s starting pay by about $1.70 per hour, but then salary compression would set in, meaning other grades would have to see increases as well. The plan eventually adopted would apply to 750 workers and cost just over $1 million a year.

Those funds were worked into the budget. However, that it seems wasn’t enough for some councilors. Councilors Republicans Grayson Boucher and John Nickelson plus Democrat LeVette Fuller wanted a 13 percent pay raise for police and fire employees, whose compensation operates in a different system which Resolution 149 didn’t affect. They tried to insert this into Ordinance 154, the operating budget, as an amendment.

At the meeting’s beginning, Democrat Councilor James Green said he nor to his knowledge the other two Democrats Councilors Tabatha Taylor and Jerry Bowman has received notice from the other three about this effort, which made it difficult for him to support. A steady stream of mostly city employees followed, commenting that they deserved pay raises that hefty as well; the budget included only a 2.75 percent bump up for all.

This launched talk about sending every, about 2,500, employee’s wage up 13 percent, which would push the minimum wage even higher to $15 an hour. When the time came, this amendment failed on a tie vote without discussion, as the three councilors not behind its introduction indicated they wanted the whole enchilada and not limiting it to public safety employees.

The increase only for police and firefighters, who comprise about half the number of city employees, would have carved almost $7.4 million from reserves. And in the meeting, about $12 million more was siphoned from these just in amendments. Dipping into reserves generally indicates deficit spending and an inability to sustain the current level of spending, although reserves appear on track for bolstering of nearly $30 million this year to $63 million in these.

Shreveport did see through October $17 million more in sales tax receipts, or an 18 percent increase over 2020’s pandemic-depressed totals. Yet smaller funding sources that make up about a quarter of sales tax levels, all of which go into the general fund, were down a bit over last year, although separate funds stayed steady. And while higher that last year’s, expenses as a proportion of budget were proportionally a bit lower than last year’s, indicating a bit of available slack.

The sales tax revenue picture plus American Rescue Plan dollars Democrat Mayor Adrian Perkins and the councilors who defeated the public safety pay raise cited as sources for supporting the blanket increase. As the budgeted total for personal services was over $212 million, 13 percent more of the total minus the existing 2.75 percent hike built in suggests an extra cost of around $21 million.

Covering that doesn’t seem sustainable. Perkins claimed ARP money gave a start to backing the raises where a few years of sales tax growth could cover the rest. More likely, the recent surpluses – based upon pared spending because of pandemic worries – in significant part came from the artificially stimulated economy from the ARP and its predecessors that look unlikely to recur (with the exception of Infrastructure and Investment Jobs Act money that will trickle in over the next five years, which for the city won’t be much more than the low eight figures).

That economy boosted sales tax revenues from purchases. But it also accelerated inflation which largely reflects in many city expenditures, substantially netting out tax gains. Spikes upwards over the past two years were well over $10 million about the average over the preceding three years, and city population had eroded further since.

Certainly, city employees have lost ground without a raise in over a decade, but it’s a matter of what the city can afford. And not only is public safety perhaps the most crucial service delivered by government, but also in Shreveport’s case its salaries start below the level of many area agencies. For years the police department has had trouble staying close to authorized personnel levels leading to complaints about coverage.

Tellingly, those councilors in support of the public safety salary increase didn’t join the announcement extolling the across-the-board raise. Their original offer isn’t unreasonable, even of the minimum wage they signed off on was excessive, and they would do best to hold the line against a blanket boost.