AUSTIN – Today, the Austin City Council will consider giving city employees a 3 percent across-the-board pay increase at a cost of $18.9 million. This uniform wage increase proposal comes at a time when the city is already facing a difficult fiscal picture that this proposal would only exacerbate.

“Austin is not in the best fiscal shape, and city leaders ought to seize every opportunity to control costs,” said James Quintero, director of the Center for Local Governance at the Texas Public Policy Foundation. “Rather than provide all full-time city workers with an across-the-board increase at great expense, city officials should consider smart, targeted alternatives that will help Austin live within its means and be better positioned to address its $8.7 billion in total debt and $1.2 billion in unfunded pension liabilities.”

“Across-the-board wage increases are bad public policy because they don’t incentivize productivity and they burden taxpayers unnecessarily,” said Dr. Vance Ginn, staff economist with the Center for Fiscal Policy. “Finding cost-saving alternatives to paying city workers that keeps taxpayers from bearing a larger burden of funding local government should be considered. Ideally, public sector salary increases should be merit-based, similar to how the productive private sector operates.”
 
To schedule an interview with Mr. Quintero or Dr. Ginn, please contact Olivia Gustin at ogustin@texaspolicy.com or 512-472-2700.

James Quintero is director of the Center for Local Governance at the Texas Public Policy Foundation.
 
Vance Ginn, Ph.D., is an Economist with the Center for Fiscal Policy at the Texas Public Policy Foundation.