Another View -- John Cataldo: Manchester needs to get control of salariesBy JOHN CATALDO
May 17. 2018 9:20PM
During my campaign for alderman, the Union Leader asked me if I would support replacing the Yarger-Decker salary index with something more equitable to both taxpayers and employees. I believe that moment has arrived, and it must now be replaced with a system that is sustainable and fair.
Yarger-Decker was introduced at a time when inflation was higher and the city did not have a tax cap in its charter. It has been nearly 20 years since Yarger-Decker was first implemented, and it is no longer sustainable and no longer fair.
That is why I am introducing a plan that better corresponds to our current fiscal climate and structure, and one that is sustainable under the tax cap. At its core, it’s actually simple: Eliminate Yarger-Decker and replace it with raises that are tied to the tax cap. This is not without precedent. The school system’s principals, directors and coordinators, certified instructors, and paraprofessionals unions have all adopted this approach already.
Roughly 50 percent of city employees are on some kind of step and longevity pay scale. In one year under Yarger-Decker, an employee on the index could receive a step increase at 3 percent, a longevity increase at 2 percent, and a cost of living adjustment (COLA) negotiated at 3 percent. That is a total pay increase of 8 percent in a single given year. Compare that to the increase in spending allowed under the tax cap this year at 1.63 percent, and it is simply not sustainable.
We are at a crossroads. Yarger-Decker was not adjusted or replaced when the tax cap was implemented in 2011, and that mistake has finally caught up with us. The new reality is that there is simply not enough money to fairly and equitably distribute. There are eight unions currently working without new contracts and with their steps and longevities frozen. Nonaffiliated employees have not received a raise in 2018. Contracts are being negotiated at different start times for different lengths of time.
Moreover, no one benefits from frozen contracts, not the employee and not the taxpayer, and it only hurts morale. As a result of the unions working without a contract, a 1 percent loss of pay for a year results in about a $35,000 loss in earnings over a career.
You do not have to be a Republican or Democrat to agree that hard-working employees should be fairly compensated. By giving raises according to the tax cap, this brings all employees under the same pay scale. Now, with unions using different pay scales with different COLAs negotiated at different times, we have to steal from future contracts to pay for current ones. In this scenario, the future is now, and we lack the funds for raises under the tax cap.
Salaries and benefits account for almost 70 percent of the city budget. In this fiscal year, if every employee out of contract received just a 1 percent COLA with steps and longevity, it would cost the city around $2.2 million. If instead, everyone received a 1.63 percent tax cap increase, the total cost would be about $1.1 million. No one would go without a raise, the raise would be fair and equitable, there would not be lost pay, and there would be excess money for other important needs.
The problem with the current system is not necessarily the COLAs or the steps alone, but the combination of the two that is unsustainable. With a new floor, ceiling, defined pay ranges, and an average CPI of 3 percent per year, an employee on the new system would likely have the same career earnings as under the old system, except that he or she will receive those earnings in a way that is sustainable over time for the taxpayers.
I understand that the final plan will not be as straightforward as I have explained, but I know that it will be sustainable and it will be fair. Ideally, the final plan will include accountability, defined pay ranges, and a new floor and ceiling among other things. For the sake of the common good, there will need to be concessions from both the city and the unions. If there is one thing I heard from the voters during the campaign and one thing I promised, it was to challenge antiquated ideas, and bring a fresh perspective and fresh ideas to City Hall so that we all can flourish.
John Cataldo is the alderman for Manchester Ward 8.