Town meeting agendas set up a clash over COLAs
In January, the Martha's Vineyard Finance Association sent a letter to every town government and public agency on Martha's Vineyard, presenting a reasoned argument for town employees to forego cost of living adjustments (COLAs) this year.
"COLAs are intended to compensate for inflation, but prices, particularly gasoline and heating costs, have been falling," wrote the association, which is made up of financial advisory committee (FinCom) members from Island towns. The association recognized that most town employees are working under union contracts with raises negotiated when the economy was in better shape, but they called on Vineyarders' sense of community to pull together in tough times.
"The COLA might add a couple of percent to each person's income, but those few percents add up to hundreds of thousands of dollars across Martha's Vineyard," wrote the association. "Foregoing the COLA would save all six towns money and would help preserve as many jobs as possible."
Dollars and sense
The process of setting cost of living increases varies from town to town, but it is the selectmen who have the final say over proposed town budgets, where those salary increases are reflected in higher personnel costs. Ultimately it is up to voters at town meetings, those who must fund salary increases through taxes, to approve, amend, or reject the budget recommendations. Historically, however, voters rarely make wholesale changes in the budgets presented at town meeting.
With most of the budgets in Island towns now set, and town meetings approaching quickly, the degree to which local governments heeded the finance association's call to hold the line on COLAs varies widely from town to town. Aquinnah, Edgartown, Oak Bluffs and Dukes County ruled out cost of living adjustments early in the budget process. In general, according to various town officials, those decisions met with more acceptance and praise than complaints by town employees. Edgartown and Oak Bluffs propose annual or "step" raises to non-union employees that mirror those in union contracts. Aquinnah town officials are still calculating their budgets, but were seriously considering foregoing the 2-percent step raise called for in the town's new compensation schedule. The Martha's Vineyard Commission granted what it first called COLAs, then called merit raises, but does not historically grant an additional increase to cover the rate of inflation. Chilmark, Tisbury, and West Tisbury propose a combination of step raises and COLAs.
West Tisbury
In West Tisbury, if voters approve budgets as proposed, most town workers will receive a 5-percent step raise, and a 3.6-percent cost of living adjustment in the fiscal year beginning July 1. Because of an adjustment to the compensation plan made last year, nearly all employees are due for a step raise next year. The board of selectmen does not support the COLA recommended by the personnel board and included in the budget, but instead voted to endorse a 2-percent COLA recommended by the financial advisory committee. West Tisbury voters will see the effect of both COLA levels in the budgets printed in the town meeting warrant.
In towns planning COLAs, The Martha's Vineyard Times asked selectmen to justify their support of the salary hikes. We asked each selectmen the same question, based on the comment recently posted to The Martha's Vineyard Times web site by a reader. "Even if town workers do not receive a salary increase they can count on health benefits and a stable salary during a very unstable economy. How do you justify COLAs to the taxpayers who must fund those salaries when many of those taxpayers are watching their retirement incomes dwindle or are in fear of losing their jobs and benefits," we asked.
Diane Powers, chairman of the West Tisbury board of selectmen, said recommending a COLA was a very difficult decision, one that has sparked more than the usual amount of pre-town meeting debate. "It's a very tough economic time, and the taxpayers have the option of amending the COLA to zero," she said. "The personnel board, the selectmen, can recommend anything they want, the final decision is up to the voters. They need to make difficult decisions, just like we made difficult recommendations."
Tisbury
In Tisbury, all town employees, except the 12 department heads, are covered by union contracts. Those contracts obligate the town to pay a 3.5-percent annual step raise, and a 3.5-percent annual COLA. According to town treasurer Tim McLean, about half of town employees have yet to reach the top step on the six-step compensation plan. Those who are still progressing through the annual steps will get, by contract, a 3.5-percent COLA on July 1, the first day of the fiscal year. With a satisfactory performance review, they will also get an additional 3.5 percent raise on the anniversary of the day they began working for the town of Tisbury. Those who have already reached the top of the six-step wage scale would receive only the COLA.
The 12 department heads work under a compensation plan different from union workers. It provides a 3.5-percent annual step increase, but nine of the 12 have already reached the top step, so they are not due any step raise this year.
A 3.5-percent COLA is figured into next year's budget for the department heads. Tisbury voters will have choices when they assemble for the annual town meeting later this month. The Personnel board, which has responsibility for recommending salary levels based on government inflation statistics, has submitted an article calling for a 4.1-percent COLA. If voters approve that, they must then authorize another appropriation to fund increases at that level.
"We've been a very conservative town," said selectman Tristan Israel. "We're in decent financial shape, so a 3.5-percent COLA for us this year, I would like to see it lower, but it's tenable to us. I want to be on equal footing with the unions."
"I'm looking out for 12 employees who consistently do an amazing job," said selectman Jeff Kristal, "and have put us in a situation that we're financially sound going forward. It's short money to retain these people to help keep our costs lower in the future."
"I think it's hard to justify an increase this year," said chairman Denys Wortman. "Personally I'd like to make it zero, but where other employees in the town are also getting 3.5 percent, it would be nice to keep it fair. This is one of the things you struggle with."
Chilmark
Chilmark uses an eight-step compensation plan for most employees. With a satisfactory job review, employees can expect an annual pay raise of 3.4 percent. This year, after a contentious debate during a joint meeting of the selectmen and the FinCom, a majority of both boards voted to support an additional 3-percent cost of living increase. Selectman chairman Warren Doty and selectman Frank Fenner, Jr. supported the increase.
"We set up a goal for this year for Chilmark to have a budget that would be less than last year's budget," said Mr. Doty. "We accomplished that. With fiscal responsibility, we've been able to stick with our wage policy, by making adjustments in other parts of our budget. We've looked at our budget and built a very responsible budget, and I'm very pleased with that."
Inflation index
Each town uses different criteria for determining how to set cost of living adjustments. Most take into account the consumer price index (CPI), a measure of retail inflation computed by the federal Bureau of Labor Statistics. The CPI tracks what urban consumers pay for a long list of common goods and services, including food, housing, clothes, transportation, medical care, and recreation. The index measures how much costs for these items have risen in the previous 12 months. More than 50 million Americans, mostly retirees, have retirement benefit adjustments tied to the CPI.
Consumers pay different prices in different regions of the country, so the CPI varies from city to city.
The Edgartown personnel board looks at the CPI for several New England cities when it sets COLAs for town employees. Then, figuring consumer costs are generally higher on Martha's Vineyard, the board usually adds a little more to the percentage to come up with a seat-of-the-pants estimate.
The month when towns set their cost of living recommendations makes a difference. For example, since the federal government doesn't calculate a figure specifically for Island towns, Tisbury uses the CPI figured for the Boston-Brockton-Nashua statistical area. Using an average of the CPI figures issued in the 12 preceding months, the personnel board arrived at its recommended COLA of 4.1 percent. Traditionally, the personnel board makes its recommendation to voters based on the September CPI, which is issued in October. That gives budget writers time to incorporate accurate wage figures. But the bi-monthly CPI figures issued since October have fallen dramatically, a reflection of plummeting energy prices and consumers who radically changed their spending habits. The November number showed an increase of 0.6 percent, and by January, the cost of living as measured by the CPI had fallen to a negative 0.5 percent. Town officials have agreed that next year, they will wait until January to make a recommendation, using the 12 preceding months. That will still allow budget writers to do their calculations, and give town meeting voters a more up-to-date assessment of inflation. But, those officials concede, as figures fluctuate, this year's trend might be reversed, resulting in a higher COLA recommendation next year.
A note about this chart: Because compensation plans, bylaws, and policies vary from town to town, it is difficult to reliably compare salaries. The COLA figures used in the chart represent the number used to calculate the budgets presented to town meeting voters. In several towns, voters will have the option to vote for a different COLA percentage. The step raises cited may be slightly higher or lower for some individuals. In towns with both union and non-union employees, compensation schedules and COLAs generally mirror each other. But some union contracts include other benefits that amount to compensation, such as extra holidays, sick time, or comp time. Also, with good pay and benefits, there is usually very little turnover among town employees. In Chilmark, Edgartown, and Tisbury, roughly half of town employees have reached the top step in the pay scale and no longer get annual step increases. In Aquinnah, Oak Bluffs, and West Tisbury, compensation plans were recently changed or enacted, so in those towns, nearly everyone receives annual step raises.
