Maybe Monroe policy-makers should think outside the box if they want to reduce the city’s operation on a fiscal knife-edge and provide pay raises for city employees without hitting up taxpayers for more dough.
At the last City Council meeting, which appended a budget hearing onto it, some councilors expressed a desire to see annual salary increases, perhaps at the 2.5 percent level, for city employees. Some also wanted more money for recreation facilities. The problem is there’s no money for any of this.
The proposed fiscal year 2026 budget showed overall about a $2 million or three percent revenue boost in the general fund that pays for most city operating activities. Raises for those functions at the desired level would gobble up more than half of that increase, as salaries, wages, and benefits comprised 69 percent of the FY 2025 budget spending. Indeed, 70 percent of that increase was going to public safety which consumes 40 percent of city spending, meaning this function would bear the brunt of any redirection of revenues at current levels.
So, the idea of a property tax increase was floated, as there needs to be a recurring revenue source to fund this. As the city has reported little in the way of surpluses over the past few years, the general fund balance has remained almost flat in the $19 million range, so there’s no slack. About 3 mills would do it for the salaries, and adding on recreation (which already has its own dedicated property tax) would cost even more.
But taxing its way to this increased spending won’t work well, especially as property tax revenue over the past decades has increased at a rate of only around one percent annually, meaning it’s unlikely to keep up with annual raises. Even throwing in sales tax revenues, which have historically grown at two to three times that over this period, into the picture still only produced an average 1.8 percent yearly increase over the decade for all city revenues. Unless a substantial tax increase occurs, any plan for annual raises at 2.5 percent will put the city under increased fiscal stress.
And taxpayers already face such stress. Monroe’s current property tax rate of 26.37 – which the same councilors rolled back last year from 27.02 after quadrennial reassessment, is the third highest in the state for a major city (although the combined rate with other Ouachita Parish governments is in the bottom half of higher-populated parishes in the state). Worse, its combined sales tax rate for most parts of the city is among the highest in the country at 10.44 percent (with a few Louisiana jurisdictions even higher).
Thus, affording pay hikes requires other options, beginning with noting that the general fund could foot this higher spending if it didn’t transfer so much money – over $4 million annually – to other enterprise funds. The FY 2026 budget has it sending a few hundred thousand to the Zoo and Civic Center, but about half goes to Monroe Transit System.
The city should investigate privatization or at least a public-private partnership to run city transit. Fares account for only about 4.4 percent of all revenues and this is declining in line with national trends of urban bus service, and even with the transfer approaching $2.5 million it’s still predicted to lose nearly $1 million in FY 2026. A fare hike wouldn’t be unreasonable, but plenty of real-world evidence suggests that private operations could reduce costs enough that the general fund subsidy could decrease enough to support some kind of annual salary adjustment, even if not as high as 2.5 percent.
And, as is good practice, there should be a compensation study prior to any pay raise proposal to see whether Monroe city salaries are significantly lower that peer cities, by how much and in what categories, for a better targeted response (the Council from last term helped its future self out and the mayor’s spot to a pay hike without such an effort, although on the present Council only Republican Doug Harvey voted for these). But if a citywide pay increase is desired, operating efficiencies rather than tax increases need to fund it.
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