Friday, August 19, 2022

114 West Elm Street
Graham, NC 27253
Ph: 336.228.7851

Money, money, money – for everyone but the taxpayer

When this newspaper’s publisher was working in the national Capitol in the 1970’s and 1980’s, he was always impressed by the philosophy expressed by a framed dollar bill in the office of U.S. Senator Harry F. Byrd, Jr. of Virginia.

The inscription read, “This is the dollar bill of a hard-working American taxpayer. Our job is to spend it as if it were our own.”

Ah, how we wish we had dozens of copies of that framed point of view that we could pass out to local elected officials.

Not that it would change their proclivity for spending money, but perhaps they could have at least a twinge of guilt for doing so with such abandon.

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We think it’s credited as being a Latin proverb that expresses the opposite idea: “It is easy to be generous with other people’s money.”

Right now, municipalities and other governmental units across Alamance County are on a spending spree, and the rationales they can develop for spending other people’s money – i.e., the taxpayers’ – appear limited only by their creativity and how deep they’re willing to dig into the taxpayers’ pockets.

Currently, the beneficiary of their largesse is municipal employees, who, according to the various municipal boards, are, inevitably, hardworking, under-paid, under-appreciated, and deserving of anything and everything that can be thrown at them.

Earlier this month, it was Mebane’s city council that decided to spend $87,829 (just through the rest of the current fiscal year) to reclassify and upgrade the pay for 61 percent of its municipal employees.

Mebane, at least, purported to target that extra money to its most underpaid job classifications, ostensibly based on the results of a $10,000 study commissioned by the city council last year.

In our own judgment, the study – which professed to measure Mebane salaries against those of “comparable jurisdictions” – had some pretty obvious, and pretty standard, flaws.

We question the underlying premise, which is where the study got off track toward a biased result, right from the start. According to the study, the comparisons involved the following counties, municipalities, and one public utility: Alamance and Orange counties, Archdale, Burlington, Carrboro, Chapel Hill, Elon, Graham, Greensboro, High Point, Hillsborough, Holly Springs, Knightdale, Morrisville, Thomasville, and the Orange Water and Sewer Authority.

Well, with a set-up like that, no wonder Mebane employees can be portrayed as underpaid.
The study includes three of the areas with the highest incomes, both among government and employees and the private sector, and highest costs of living in the state: three municipalities (Holly Springs, Knightdale, and Morrisville) in Wake County; four governments in Orange County (Carrboro, Chapel Hill, Hillsborough, and Orange County government itself), plus the Orange Water and Sewer Authority; and four jurisdictions in Guilford County (Archdale, Greensboro, High Point, and Thomasville).

There’s a famous quote attributed to the British prime minister Benjamin Disraeli, “There are lies, damn lies, and statistics.”

We suspect one might create, as Mebane’s consultant did, some very lopsided results when the places you use to compare have higher costs of living.

Now, part of the supposition is that these jurisdictions are “competitors” for the same employees. Does anyone working here actually want to add an hour commute to work in some of these other areas?

We found it interesting that not one iota of evidence was presented to conclude that any Mebane employees had actually left the city’s employ for any of those jurisdictions – in any payroll category, i.e., not police, not public works, nor any other category where Mebane workers were supposedly underpaid compared to these other jurisdictions.

And, by the way, also telling was that Mebane’s city turnover rate is relatively low; city employees aren’t leaving the city for anywhere!

Still, the city council decided to bestow tens of thousands of dollars of the taxpayers’ hard-earned money on some of its employees.

Then, to make matters worse, in the name of addressing inflation, the city council granted an across-the-board raise of 3 percent to all city employees.

Yes, we noticed that the federal government concluded at the end of the year that inflation during President Joe Biden’s first year in office was 7 percent, the highest in 40 years. Since then, an even newer report has revealed that inflation is now running at 7.5 percent.

But back to Mebane. By granting a 3 percent COLA in March, at a partial-year cost of $106,659, the city council is setting up even greater escalating costs for the future – not only for a full year of implementation, which will add dramatically to the tab, but also by implying that another cost-of-living raise will be considered during the “regular” budget season later this spring.

Are we the only ones who’ve noticed that when some idea for saving money is presented to local governments, they simply must wait for the regular budget in order to trim any expenditures. But when it comes to spending money, why they can turn on a dime to do so with no notice whatsoever. Taxpayers in Mebane, for instance, were not told in advance that city council members intended to consider such large salary increases at their February 7 meeting.

Another problem with the Mebane’s early COLA is it will compound whatever subsequent COLA is enacted, unless the city makes any subsequent (regular budget) COLA based on pre-March salaries. Much like compound interest, the compounding of one COLA on top of another will raise salaries at costs even greater than the actual cost-of-living increases.

And, by the way, we observe that COLAs seem always to be rounded up. Mebane has repeatedly designated cost-of-living raises in many previous budget years at rates above the actual cost-of-living. But, as always in government math, no facts ever offset the desire to spend more.

One of the very predictable consequences of Mebane’s spending spree is that it would contribute to other local governments ratcheting up their salary schedules, as well.
So this week, it was Graham’s city council.

As in Mebane, no advance notice (beyond two days) that any potential salary increases were to be considered by the city council; indeed, there was absolutely no information, no agenda packet, nor other, typical data provided.

Graham’s council was so breathless to hand out raises, its officials didn’t provide any basic information that might have substantiated any salary consideration.

What are the vacancy rates, by department? Not a word.

What are the departmental turnover rates? None given, although a few anecdotes were thrown out.

Some local governments and government agencies have expressed concerns about escalating turnover rates; the county’s commissioners gave significant raises to three county agencies with higher-than-average turner rates before Christmas – detention officers within the EMT workers (11.5 percent); social service workers (25 percent); and detention officers within the sheriff’s office (33 percent).

And while we were no more wildly enthusiastic about those raises than we are those in Mebane and Graham, at least county officials had some measurable, objective basis for pointing to problem areas that they felt needed to be addressed.

At various times during Graham’s city council discussion on Wednesday, mayor Jennifer Talley and Bobby Chin seemed to recognize that the focus really should be on Graham’s three troubled departments that have been operating with short staffs.

But councilmen Ricky Hall and Joey Parsons were gung-ho to give everyone the $2.00 per hour raise that was being discussed.

In the end, both Talley and Chin capitulated to the other free-spenders.

Unlike Mebane, which at least ostensibly “targeted” its raises to 61 percent of its employees, Graham just dumped the whole amount on everyone.

What we found even more galling was one of the excuses given for bestowing the taxpayers’ money so generously – ironically by Chin, who had been more reasonable during most of the discussion: at least taxpayers wouldn’t have to pay higher property taxes, Chin suggested, since there was “already” money in the budget for these raises.

Whoa, there! As a matter of fact, the $179,000 that the council flippantly spent on all its employees as a mid-year bonanza actually represents about 1.5 cents on the tax rate, based on the city’s current budget.

Each penny on the tax rate in Graham generates $115,612, according to the current budget. We’re quite sure most taxpayers – certainly count this newspaper among that number – would much rather have some of our tax money back or our future tax rates cut.

We wanted to have those framed dollar bills from Senator Byrd’s office this week. Graham’s city council certainly needed to adopt his rationale, rather than pouring money indiscriminately into every city employee’s pockets.

We think an argument could be made for some degree of targeted focus on Graham’s lowest-paid, or most disadvantaged, departments.

But the vote for across-the-board raises was, quite simply, irresponsible, even reckless – and deeply disappointing. We had thought Graham’s council members were more fiscally responsible than they proved to be this week.

Another illustration we found misleading, even fraudulent, at both Mebane and Graham meetings involved the fast-food giant, McDonald’s.

Well, don’t you know, McDonald’s is paying its employees $14 to $15 to $17 per hour? Both the consultant and Graham’s personnel chief, Lorrie Andrews, tossed out that at their respective meetings.

Pardon us, but last we checked, most, if not all, of McDonald’s staff are part-timers.

If we’re not mistaken, most don’t qualify for very generous health benefits (which municipal employees get, but don’t even consider as a special benefit any more).

Nor are they likely beneficiaries of the lavish (multiple) retirement programs that both Mebane and Graham city employees enjoy.

So the comparison is not very relevant at all.

As we say, we’re quite convinced the bad news from Graham this week, following the bad news from Mebane earlier this month, will, inevitably contribute to yet more escalation of local government salaries.

That’s another fundamental problem of all these “pay studies” with their salary envy.
Every other jurisdiction’s elected boards – think about the towns of Elon, Haw River, and Gibsonville, locally – will believe they’ve simply got to give raises, in order to keep up with the competition in Mebane and Graham.

And, by the way, we fully expect that those jurisdictions whose high salaries were used as the comparison points for Mebane’s study will now feel compelled to up their salaries even more, in order to keep their advantage over other areas.

It just never ends.

All at the poor taxpayer’s expense.

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