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Wednesday, December 11, 2024 83° Today's Paper


City can’t afford 8 percent raise

Members of the Honolulu City Council are expressing a fair degree of sticker shock over proposed city leadership pay raises, and with good reason. An 8 percent boost in pay goes above the level most people expect in a routine wage increase.

And yet that is the proposal submitted to the Council by the city Salary Commission, a plan that will undergo some vetting from the public at a hearing set for 1:30 p.m. April 29 in the Council committee room. It would be striking if the plan does not elicit a strong protest.

The increases would affect Mayor Kirk Caldwell, members of the Council and most department heads, starting July 1.

The commission is bound by the City Charter to consider the differential between what top managers get and rank-and-file salaries, a differential that has gotten out of whack. Members studied comparable pay in mainland cities, and Honolulu salaries lag in several areas.

Sara Buehler, who chairs the commission, added that the pay gap widened when administrative raises were curbed during the worst of the recession, and that some of the panel’s recommended increases have been declined by officeholders. Given the pending raises coming to the staff, Buehler said, the 8 percent boost was needed to push top administrators ahead in pay.

These are difficult constraints. But the fact remains that this large an increase will set off further escalation by public employee unions in future negotiations. The rebalancing needs to be more gradual, and involve tougher negotiations with public employee unions.

There is, of course, the basic bottom-line concern aired by Ann Kobayashi, the Council’s budget chairwoman, who wondered aloud where elected leaders will get the money. And even though the pay-packet increases for a small number of administrators amounts to relatively little — an estimated $250,000 a year, Buehler said — the full effect of such a boost has to factor into the debate.

If administrators get such a walloping increase, the unions will feel emboldened to insist on something similar in their next go-around for their 10,000 workers. Further, the raises also have an impact on long-term liabilities for pensions.

That ultimately adds up to big money — which the city doesn’t have. Council members already are "scrambling," to borrow Kobayashi’s term, to find money for pressing concerns of homelessness, parks upkeep and sewer-system upgrades without hitting taxpayers too hard.

If the city wants to maintain a healthier differential between what leadership makes as compared to the rank and file, administrators had better accept more modest increases for themselves and drive a harder bargain in the next round of contract negotiations.

According to minutes of one March commission meeting, one member suggested that the ideal rate of increase is 2 percent, simply to keep up with the rate of inflation. Getting back to that model should be the goal.

In the private sector, employees have made do with far smaller raises than even the original 4 percent pay hikes more typical in government recently. When the economy was at its rockiest, many took pay cuts. By and large, there’s no such thing as catch-up raises for them; pay deals are justified on the basis of current economic and working conditions, not a predetermined rate of increase.

The bill for all this comes due to the taxpayers, who can hardly afford to hand out 8 percent pay raises.

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