Employee Compensation

A reader recently asked what’s going on with compensation for City employees.

The short answer: total compensation of City employees is going up, and the percentage of the City budget going to City employees is going up again this year.

Here is the more detailed answer and some history:

Based on a promise made to its employees, there will be a raise for all City employees for the entire fiscal year. In addition, $53 million will be allocated to employee pension funds in the current fiscal year. And the City will not pass along to employees a $3.3 million increase in health care costs to employees and their families.

Here’s some history:

In the last five years, the overall City budget has gone up by about 15 percent.

In Fiscal Year 2000, $265 million was allocated to compensate City employees. That represented 70.8 percent of the budget. This year, $348 million will be allocated to compensate City employees, a 31% increase. Employee compensation now represents 75.5 percent of the budget.

According to the City’s Budget Division, the only way to offer higher pay raises would be to lay off other employees. I doubt that most department directors - or the chiefs of the police and fire department - would be able to promise that the same level and quality of municipal services could be provided by a much smaller workforce.

More revenue would help - and that has been growing. But, because of the poor national economy and major local changes, the short-term outlook for the City budget is uncertain. For instance, we do not know what Inbev’s purchase of Anheuser-Busch will mean to its St. Louis operations and the more than $21 million the company pays in City taxes.