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Special Report, Oct. 2004: Salinas City Measures A, B & C
Posted on Friday, April 22 @ 19:22:27 EDT by Webmaster

Special Reports Special Report‘Why an ounce of efficiency is better than a pound of taxes’

Salinas City government can use the money taxpayers have given them more efficiently to provide services, but Measures A, B and C, which only raise taxes, would encourage continued wasteful spending.

The three tax measures are expected to cost taxpayers about $12 million the first year, nearly a 20% increase in general fund revenue.

City officials say that even if all the taxes were imposed, don’t expect services to be restored to last year’s level. But service can be restored, without more taxes, if city officials would rein in employee salaries, benefits, and increase competitive contracting for services.

The Problem:

Employee Cost v. Cost of Living

City revenues have been steady, even during a recession and a temporary reduction of state funding. But salary and benefit costs for city employees are increasing at a rate much higher than the cost of living.

The average cost of a fulltime Salinas City employee is rising to over $100,000 this year.

Even with fewer employees than last year, city officials have a plan to spend $9 million more for employee benefits, and another $3 million more for salaries over a two-year period from all funds.

A large portion of employee benefit costs include retirement plans that were sweetened a few years back when retirement benefits were enhanced and retirement ages were reduced.

General City Spending v. Revenue

Solutions:

Permanent solutions include employee pay concessions and increased competitive contracting of city services, which aren’t likely to happen if the proposed taxes are imposed.

Historically, realistic salary and benefit concessions only happen after an attempt to increase taxes has failed. Only after Measure P failed last March were pay cuts imposed to extend a service.

A recent independent report by Reason Public Policy Institute (www.rppi.org) found that commercial service providers can provide many Salinas City services for less cost and with less risk, saving city taxpayers about $17 million a year.

NOTES:
Graph 1: Rising employee cost versus small cost of living trend.
From $80,169 in 2002 to $91,853 in 2003, $100,003 in 2004, and $110,076 in 2005.

Graph 2: General expenditures versus increasing revenue.

*Published Oct. 2004

 
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