Commissioners questioned the logic of keeping county salaries flat amid the economic downturn Tuesday, ultimately settling to hold off on regular increases for employees for now.
“Holding the salaries flat for one year is respectful, also realistic,” Commissioner Mark Barron said, adding that it’s “irresponsible to think about spending money we don’t have coming in.”
The Teton County Board of County Commissioners has been operating under the assumption that sales and lodging tax collections will fall 50% in the fiscal year starting July 1, a result of decreased tourism and economic activity brought on by the pandemic.
That would pencil roughly to a $10.3 million hit to county revenues in the 2020-21 fiscal year. The county’s general fund budget, which is powered by sales and lodging taxes, was about $45 million in the 2019-20 fiscal year, which ends June 30.
Salaries make up a large portion of the county budget.
Up until Tuesday, commissioners had largely agreed to keep employee pay flat in the upcoming fiscal year, meaning there would be no regular 2.5% merit increases.
But other businesses and government entities may take a different path. While 32% of employers nationwide are delaying salary increases, Teton County Human Resources Director Julianne Fries said 57% are not.
Fries said she was concerned about “salary compression,” which can occur when salaries are frozen and employees’ pay doesn’t keep up with marketwide increases.
When the freeze lifts, recently hired employees looking for a market salary can end up with pay on par with long-standing employees who, if the freeze hadn’t happened, would have been paid more than the new hires.
Fixing salary compression can be costly, and it has been for the county, which froze salaries during the last recession.
Commissioner Luther Propst pushed for allowing merit increases.
“I think we need to look hard at some of our capital expenditures and decide if there’s a possibility of providing our staff with a pay raise,” he said. “Their costs are continuing to go up.”
Earlier in the meeting, Commissioner Mark Newcomb hypothesized that the real estate market might not crater in the economic freefall, causing employee housing costs to increase.
“It almost seems like more people are going to be moving here to get away from crowded urban areas that are more prone to the spread of the disease,” he said. “So I’m worried about our salaries and freezing them and our employees.”
But the county was handcuffed, he said, by its dismal revenue projections. That led him to side with Barron and Commissioner Greg Epstein in favor of keeping salaries flat.
Commission Chair Natalia D. Macker was absent for the salary discussion, which is not over. Commissioners have weeks to go before approving the budget.