Throughout the two years I’ve been on the Finance Advisory Committee for the City of DeKalb, I’ve heard the phrase “internal equity.” The first time I heard it was last year during the FY2009 budget deliberations. The City Council had just voted themselves a 10% pay cut to show leadership needed for some tough decisions that needed to be made. Tough decisions are often made necessary when expenditures are allowed to increase more than 6% annually while revenues were only increasing some 3%.
But a few weeks later when the City Administrators’ pay schedule became an item on the agenda there was no consideration of a pay cut for them. Instead, the routine 3-4% increase was the staff recommendation for the council to consider. When a few council members asked why their leadership move was not being followed (pay cut) the answer was simply, “internal equity.”
I guess the council members were left on the outside looking in on that one.
Despite an “internally equitable” indefinite hiring freeze and 5 unpaid furlough days for each member of the management, city workers, police and firemen — plus a plethora of tax and fee increases on those outsiders known as citizens — another budget crisis appeared, post-campaign season, for FY2010.
The only internally equitable thing to do was to ask each member of the management, city workers (AFSCME), police (FOP) and firemen (IAFF) to take a voluntary pay freeze for FY2010. The carrot held out to the union workers was if they accepted the wage freeze, fine, if not then three of their members would be laid off. The three unions thought that the carrot tasted more like a big stick. They thought they had negotiated contracts that called for raises. They thought contracts should be worth the paper they are written on. The FOP negotiated a new contract and tentatively agreed to the one year pay freeze. AFSCME balked at first but negotiated their way to a one year pay freeze with the stipulation that none of their workers would face lay-offs until their contract expired. IAFF held their position that a contract was a contract. Three firemen were laid off. Negotiations continued. There is now a tentative agreement, subject to city council approval, that will freeze the firemens’ wages for 11 months in return for no lay-offs until their contract expires at the end of FY2011.
Internal equity sure makes the decision process easier. Much easier than prioritizing government services, for example. But it leads to decisions like laying off three firemen when that department is understaffed while maintaining a staff of building inspectors when there are more inspectors than building permits. It also, and perhaps most importantly, leads to mediocre leadership.
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