In Tough Times, Bold Action is Needed

Newton—Faced with declining state aid and reductions in local revenue streams, such as auto excise tax, hotel/motel tax and new growth property taxes, we in Newton government must make some tough choices. In the long term, we can restructure services to make them more cost-effective and we can pursue new revenue streams. However, our choice for the upcoming year is much more stark: we can lay off dozens of employees, or we can hold the line on salaries.

I believe that we can get through next fiscal year without layoffs or reductions in service if our mayor, School Committee and employees agree to a one-year moratorium on Cost of Living Adjustment salary increases in exchange for a one-year moratorium on layoffs.

Under this scenario, we would avoid layoffs through consolidation, attrition and other cost-control measures, with a promise to our employees that we will tap into our cash reserves if other measures are not sufficient to prevent layoffs.

This approach to the fiscal 2010 operating budget is the only realistic way to prevent significant service reductions, such as increased class size in our schools; longer waits in line at City Hall to pay bills; slower emergency response times; and less snow removal for our streets and sidewalks. The one-year COLA freeze would allow us to maintain all of these services at current levels.

The case for why this approach makes sense at this time has been made by other public-sector and private-sector employers. For example, Mayor Menino has proposed wage freezes for city of Boston employees, and President Obama has frozen the salaries of some White House employees by executive order. Similarly, companies including Avis and Yahoo have recently implemented pay freezes to avoid layoffs.

Also, the justification for COLAs is that inflation reduces employees buying power, but in the current economic climate, many costs are going down. In a deflationary environment, there is no policy basis for COLAs.

But will our employees agree to this approach? I hope so, since it is in their best interest. Every 1 percent COLA increase that is included in the fiscal 2010 budget will cost us about $1.7 million. That translates into about 30 employees being laid off for each 1 percent COLA awarded.

Even without any COLA salary increases, we face a projected deficit of approximately $4 million. Attrition through retirements and other cost-control measures will help to close some of this gap, but will not be sufficient to avoid layoffs if we offer COLA salary increases.

Under this proposal, employees will still be entitled to earned salary adjustments, such as step increases as employees gain experience and bonuses for achieving advanced degrees.

Many Newton residents have recently lost their jobs, and many more have accepted pay cuts to keep their employers afloat. I believe that in this time of economic crisis, it is not too much to ask of our employees to forgo COLA salary increases this year.

I have discussed this idea with prominent business and community leaders and have received widespread support for the proposal. I have also presented these ideas to the mayor and School Committee, who are responsible for working with our union and non-union employees to determine fair and appropriate compensation. My hope is that if Newton residents support this idea, they will share their thoughts with our elected leaders.

President Obama has asked all Americans to work together to help lift our economy out of recession. The best way we can do this in local government is by keeping our employees working to provide services for Newton residents, not job-hunting and collecting unemployment benefits in this difficult economy. In time of crisis, we need to pull together for the benefit of our entire community. Shared sacrifice is not easy, but I believe that we are up to the challenge.

~ Ken Parker

Note: This letter was also published as a column in the January, 27 Newton TAB