Reform 5.1: Salary Reduction and Freeze

Implement a 2% General Salary Reduction (Non-Public Safety) – and Freeze Base Salaries for Five Years.

Other Information:

Many government agencies have implemented furlough programs. In the past, some city labor unions have proposed expanded furloughs in lieu of salary reductions. It should be noted that furloughs might result in impact to service levels depending on how they are implemented. Worse, as is the case with the MEA furlough program, furloughs allow for special assignment pays to be calculated based on a full base rate before subtracting pay for the mandatory furlough, and also does not reduce the amount of SDCERS pensionable compensation.3 To achieve balance in FY 2012 without expanding furloughs, the Roadmap to Reform includes general salary reductions of 2% for MEA, DCAA and all Unclassified/Unrepresented employees from the status quo, or baseline. This is estimated to produce General Fund savings of $3.9 million for MEA and DCAA, plus any savings from a 2% salary reduction to unrepresented employees. The five-year freeze in salaries is consistent with the Mayor’s proposed financial forecast. More importantly, as outlined in Commitment 4 on Pension Reform, a five-year base salary freeze is absolutely essential to reducing long-term pension costs in city government - by freezing “pensionable pay” for city employees. NOTE: We recommend that any reduction taken here should be taken as the city’s starting position in labor negotiations with Police and Local 127 in FY 13.

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