The gist: The City-Parish Council approved pay raises for the fire department, public employees, and the marshal’s office Tuesday. In total, these raises increase annual expenses for the city general fund by $3.7 million and the parish general fund by another $60,000. Without offsetting revenue gains or cuts to expenses, both the city and parish general funds are projected to go broke in the next few years.
Get caught up quickly: Earlier this month the council approved $3.8 million in raises for the Lafayette Police Department. Combined with funds approved Tuesday for city employees, the city general fund is projected to have to tap into more than $18 million of its $45 million fund balance over the next fiscal year. If nothing else changes, that puts the city general fund on track to go broke by 2023, according to numbers provided by LCG Chief Financial Officer Lorrie Toups. Parish general expenses will only increase $60,000, but that will reduce its projected fund balance by 60% and put it in the red by 2021.
No one questioned that these raises are warranted. While none of the votes to approve these raises were unanimous, not a single member of the public or council or the administration argued against the merits of giving them. Interim City Marshal C. Michael Hill went so far as to suggest that the pay increases for his deputies weren’t even raises. That’s because they hadn’t received pay increases in four years, yet their costs for expenses like health insurance premiums had gone up. So that means their take home pay has actually been decreasing over the last four years.
But there was no discussion about how to pay for these increased expenses. At the Nov. 5 meeting, Councilman Jared Bellard introduced a measure to eliminate all budgeted but vacant positions to free up money for raises for first responders, but the measure was deferred until the next meeting on Dec. 3. Approving these raises, the last consolidated council has set the next city and parish councils on a difficult path for their first term.
And there still might be one more raise to come. The only dissenting voice on the matter of giving raises to LCG’s civil service employees was City Judge Doug Saloom. While he didn’t speak out against giving these raises, he instead argued that his 36 employees shouldn’t be left out just because they work under the judicial system. He was encouraged to submit an introductory resolution by today’s noon deadline to get onto the agenda for the next council meeting and indicated he planned to do so. Given the number of employees, though, any additional expenses incurred by giving these raises should be modest relative to the size of the financial challenges now facing the city’s budget.
What to watch for: Just how bloody next year’s budget cycle looks like for both the city and the parish. The parish has already cut budgets year after year, struggling to maintain even a $100,000 balance in its general fund. Now there will be even less room to maneuver with these increased expenses. The city was projected to tap into its general fund to maintain baseline operations for the next few years before the pay raises were added. Now the city general fund will be projected to fall below the 20% minimum fund balance set by LCG’s fiscal policy by 2021 and be completely zeroed out by 2023. Given that neither the parish nor city general fund balance can legally go below zero, more cuts are likely coming.