City Employees' Pay Frozen To Stave Off Budget Deficit

Pay freezes are on the horizon for employees of the City of Laurel,  announced Mayor Craig A. Moe  Monday night during the Laurel City Council meeting.

This comes as a result of officials maneuvering to avoid a roughly $3.8 million budget deficit brought on by a decline in property tax revenues, according to Moe.

As the city moves into the fiscal 2012 on July 1, the pay of all city employees will remain frozen at the current fiscal 2011 levels, although there will be no cuts in city services to residents.  The freeze is expected to help reduce the $3.8 million budget deficit. 

There was a 2.5 percent performance-based longevity increase for full-time employees and a performance award program during fiscal 2011, according to the city’s budget. But in fiscal 2012, that won’t be happening, Moe said.

“It’s been a very tough budget,” he said. “I understand what city employees are going to have to deal with.  We’re not going to have to do any furloughs or layoffs.  We’re prepared to move forward.”  

City Budget Director Michele Saylor said the city’s projected deficit is not occurring because the size of the city’s property tax base has changed.

Instead, Saylor said, like in much of the nation, the assessed value of property in Laurel has decreased. As a result, it’s estimated that the city will receive $3 million less – or 15 percent – in property tax revenue than it expected to receive.

Laurel received $20.7 million from real property tax revenue this  fiscal year 2011. The total city budget for this year is $27.6 million, according to the city’s budget document.

Moe said a preliminary fiscal 2012 budget will be released in coming days and  told Laurel Patch that the city whittled away at the potential $3.8 million deficit in a number of ways:

• The pay freeze will save about $360,000.
• Several months ago, the Laurel City Council voted to spend about $1.5 million from a fiscal 2011 reserve fund to pay off a $1.5 million bond that was due in fiscal 2012.
• The City Council recently voted to issue a bond sale for city roads and other capital projects. By borrowing money, the city will not have to spend $600,000 that it would have spent on those projects in fiscal 2012.
• Across the board budget cuts. Moe and Saylor said they could not yet provide specifics because the budget is still being written.

“All departments are sharpening their pencils and reevaluating their programs. No programs are going unchanged,” Saylor said.

She said that the city will not lose any positions and public services that residents receive, such as trash collection, would remain the same.    

The mayor and council are tentatively scheduled to discuss the budget during a work session meeting at 7 p.m. on April 6 in the city municipal building.