Payroll Problems
Mecklenburg County employees – at least the ones who still have jobs – would go without pay hikes for the second year in a row, under the budget County Manager Harry Jones rolled out Tuesday night for the upcoming fiscal year.
And while Jones cautioned that the pay freeze could put the county at risk of losing high-performing employees to the private sector, and urged commissioners to not consider wage reductions to fill funding gaps for programs and services, some wondered if the manager’s reasoning was valid.
“I don’t buy, frankly, that we’re losing good talent right now to the private sector,” said Commissioner Harold Cogdell, a Democrat. “I don’t know who the constituency is that you know about who could get displaced today and find a job tomorrow in this economy.”
In addition to freezing base pay and providing no funding for merit pay raises, Jones’s budget increases employee costs for health and dental insurance and extends a suspension of the county’s 5-percent match for employees’ 401(k) and 457 retirement accounts.
About $9.5 million of the $16.9-million reduction in employee compensation Jones is recommending comes from suspending so-called Other Post-Employment Benefits, which pays the future healthcare costs for employees who retire from the county. The move would not impact current employees, but Jones is recommending that the county not offer the post-employment benefits to anybody hired after the July 1 start of the new fiscal year.
Eliminating any additional cuts to employee compensation above keeping current pay flat, Jones said, “would create the greatest harm to our ability to serve this community going forward.”
“Already, we are beginning to see valuable talent lured away by higher pay in the private sector,” Jones said.
Cogdell remained skeptical.
“I would need to see some specific data, other than somebody in the county manager’s office telling us we stand the risk of losing talent, of how that’s occurring,” he said.
He asked the Jones to run numbers on how much money could be saved by implementing across-the-board pay hikes of 1, 2 and 3 percent. Based on his own estimations, Cogdell said a 3-percent cut could potentially save about $573,000 a month, based on employee headcount before layoffs recommended in the budget. The budget calls for pink-slipping 357 employees and eliminating 429 department positions.
Cogdell said that the money generated through pay cuts could be used to fund programs and services.
“There are a lot of people that are unemployed, under-employed and in very, very difficult financial situations,” he said. “We’re impacting people’s lives by cutting services.”
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