Jonesboro employee raises approved, but mayor warns about tighter 2017 budget

Jonesboro aldermen unanimously approved about $1.4 million in pay raises this year for firefighters and non-uniformed workers Tuesday night, but Mayor Harold Perrin warned the move could affect capital improvement projects in the coming years.

Perrin told Talk Business & Politics the city’s sales tax receipt increases in recent years are not enough to cover these pay increases, and ones given to police department employees in September.

“I’m very pleased … I think every employee in the city of Jonesboro deserves a competitive salary,” Perrin said. He later added “Our 2017 budget is going to be very conservative when it comes to capital improvements.”

In recent months, council members approved about $2 million in employee raises this year alone, and the amount is expected to steadily increase in the coming years. Capital improvement expenditures have in recent years ranged between $6 million to $8 million annually, but next year it may drop to $1.5 million, Perrin said. A final decision about the capital budget for the upcoming year will be decided in the coming weeks.

Sales tax revenues have steadily climbed in recent years. Jonesboro collected $13.1 million in city sales tax through September, a 5.2% increase from the previous timeframe in 2015. Sales tax receipts, the city’s primary revenue source, have risen consistently the last three or four years, Perrin said. If those numbers continue to grow, the city should be able to absorb these pay increases, he said.

The city has a $23 million reserve fund to help meet budgets, the mayor said. But, a natural disaster could deplete the fund quickly, and it won’t last if the city maintains its capital improvement spending levels and the employee raises, he said. The fund could be gone in as little as eight years if spending goes unchecked and sales tax receipts stagnate or falter.

Raises for all three groups are retroactive to Oct. 1. About $800,000 will be spent on firefighter salaries raises, a 9.3% payroll increase. Nearly $650,000 will be spent on non-uniformed employee pay increases, a 5.9% payroll increase. The city will spend about $9.4 million on its firefighters and $11.7 million on non-uniformed employees in 2016 once the pay hikes are implemented.

These figures are likely to decrease now that a retroactive date has been reached, Perrin said. Those exact figures were not available to Wednesday afternoon.

The city has opted to buy 72-acre swath adjacent to Joe Mack Campbell Park in Jonesboro. The William B. Lacy Jr. Family Trust offered the land to the city for $542,385, about half what its worth, according to estimates. The value can be written off the Trust’s taxes if the transaction is completed by the end of the year.

“It’s obviously a great price for this piece of property,” Perrin said.

The land could serve several purposes, Perrin said. An aquatic center could be built on the property, and some nearby soccer fields at the park could be expanded.