MIAMI (CBS4)- Struggling to close a yawning $400 million budget gap for the new budget year that begins Oct. 1, Miami-Dade County is scrapping a 3 percent cost-of-living raise for executives and other non-union employees who are under the mayor’s purview.
Nearly 3,000 county workers will be affected. The county expects to save $7.5 million over the course of a year by withholding the pay increases that were to begin in July. The county executives and exempt employees haven’t gotten merit raises either since 2007, according to CBS4 news partner The Miami Herald.
But most county employees are still on track for 3-percent pay raises in July, as they enter the third-year of three-year union contracts. However, that could change if the next mayor pushes to open collective bargaining agreements.
Pay increases at County Hall are a hot-button issue that sparked voter outrage, fueling a sense among many that county government is disconnected from a public still grappling with a sluggish economy. That voter backlash contributed to the dramatic ouster of former Miami-Dade mayor Carlos Alvarez.
In the wake of the Alvarez’s recall on March 15, 11 candidates are vying for the mayor’s seat in a special election set for May 24. The frontrunners have all taken fiscally conservative stances, stumping on the need to rein in county spending.
The sour news for county executives and colleagues came in a memo Friday from County Manager Alina Hudak, who said she plans to ask the county commission to amend the county’s pay plan next month to eliminate the cost-of-living increase as one of a host of austerity measures the county is pursuing to make ends meet in tough times.
With property values still declining, Miami-Dade is bracing for about a $250 million budget gap for those areas of government that rely on property taxes. That’s because the cost of providing services is rising and the tax rolls are expected to shrink again after a 13.4 percent decline this year, according to the Herald.
County officials have been estimating the tax roll will drop another 5 percent when the property appraiser, Pedro J. Garcia, issues the preliminary tax roll values June 1. Final numbers come out in July.
In addition to dwindling property-tax revenue, the county expects another $150 million budget gap in those areas of the government that generate their own revenue, such as the water and sewer department, assuming rates and fees are held flat.
Hudak’s request to eliminate cost-of-living raises for executives and exempt employees under the mayor will be presented to the county commission on May 17.
Other areas of the county — including the clerk of courts, the office of the county attorney, the county commission, and the property appraiser — must also eventually come up with savings, although none has yet announced similar whacks to executive and non-union workers’ pay.
Alvarez was forced from office by a stunning 88-12 margin, largely because of his decision to propose a budget last year that raised the property-tax rate while handing raises to most county employees. Under collective bargaining agreements, most employees are set to get 3-percent raises in July. The raises coming in third year of three-year contracts follow union concessions during the first two years.
County executives and non-exempt employees also participated in those concessions, which included pay freezes and agreements to begin contributing 5 percent of pretax income toward their health care costs.
The cost-of-living freezes are just the tip of the iceberg. County officials acknowledge it is hard to imagine how the county will avoid significant layoffs in the coming year.
By trimming spending this year, the county expects to be able to save about $17 million that can be carried over to next year’s budget.
In a memo Friday, Hudak, who became county manager when George Burgess resigned last month, said she had begun meeting with leaders of 10 unions to discuss new contracts.
“They know that compromises on salaries and benefits are the only way we can survive without massive layoffs and cuts to essential public services,’’ Hudak said. “These discussions are still preliminary.’’
(©2011 CBS Local Media, a division of CBS Radio Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. CBS4 news partner The Miami Herald contributed material for this report)