On May 17, 2011 an arbitrator issued an award determining police salaries for five years. It raised their pay approximately 20 perent over this period of time. This award was the result of a voluntary arbitration agreement between the village and the PBA which set forth the criteria for the arbitration award.
This award may have a devastating impact for next year’s budget. Our current budget for police salaries is approximately $10,000,000. On June 1, 2012 this award will increase this budget, by approximately $450,000, a 4.5 percent increase. The governor and legislative leaders of both houses have agreed on legislation to cap property taxes at 2 percent. Under this cap the village will not have sufficient revenues to pay for this 4.5 percent increase. It will have to find $250,000 elsewhere in the budget. That will be a daunting task as the salary and benefits of the other village employees as well as the cost of goods and services will rise at least 2 percent. The alternative is to lay off employees and cut services.
The village board and its counsel were well aware that a 2 percent cap on property taxes was being considered by the governor and the legislature. It would have been a simple matter to have provided in the arbitration agreement that in the event a property tax cap was enacted that the award be reopened to determine the ability of the village to pay any wage increase for that year. Obviously if the village lacks the ability to raise taxes by more than 2 percent, any wage increase should be limited by that amount. That is a matter of common sense.
Question: Why did the board of trustees and its counsel fail to take this simple step to protect the interests of the taxpayers?