Pay raises in Girard bitter pill to swallow for many taxpayers

The arguments put forth by mem- ers of Girard City Council for pay raises for themselves, Mayor James Melfi and others in the executive branch were persuasive, given what has taken place over the past 10 years. And yet, our immediate reaction to the front-page story in The Vindicator was one of trepidation.

How could government officials even contemplate boosting salaries when the economy of the nation and the state is in the doldrums? Even if Girard’s finances look good for the foreseeable future, shouldn’t caution prevail? Is a 6 percent raise for the mayor, safety-service director, law director and auditor justified in light of the wage freezes and other concessions being exacted from public employees at all levels of government?

We have no doubt that these and other questions are being asked today by Girard residents who work in the private sector and who have had to agree to significant givebacks just to hold on to their jobs.

On Wednesday, when council voted on the raises, the stock market lost more than 300 points. On Thursday, the market’s decline topped 500, a clear indication of just uncertain investors are about the U.S. and global economies.

Our discomfort over Girard council’s decision on the raises should not be viewed as a criticism of the way Mayor Melfi and city lawmakers have served the people over the past decade of fiscal emergency.

The state of Ohio stepped in when the city’s operating budget collapsed under the weight of $2.55 million in red ink. A special fiscal oversight commission took over Girard’s finances in August 2001, and officials were forced to swallow some very bitter medicine.

To their credit, the mayor and council did everything that was demanded of them by the commission. They slashed spending, secured concessions from the employee unions and generally pinched pennies.

At the beginning of this year, Melfi declared that the city’s financial fortunes were changing — Girard ended 2010 with $50,000 in the general fund — but insisted that a spending spree was not on his agenda.

In addition to the state oversight commission keeping a tight rein on the budget, Girard also hit the jackpot with the decision by V&M Star of Youngstown to build a $650 million, state-of-the-art steel pipe-making facility adjacent to its current plant. Because the new plant is on land that was originally in Girard but is now within Youngstown’s borders, the two communities are receiving a financial windfall.

Budget forecast

Girard is expected to come out of fiscal emergency next year, and the mayor and council have developed a five-year budget forecast that reflects a positive balance sheet. The raises are included in the forecast.

In justifying the pay hikes, Finance Committee Chairman Frank Migliozzi noted that Girard will have $240,000 that was not spent last year, and a $500,000 budget surplus.

We would have no misgivings about the mayor and others being rewarded with higher salaries if the national economy were humming. But the reality is that unemployment is still above 9 percent and businesses are not creating jobs at the pace the Obama administration anticipated.

In addition, Ohio Gov. John Kasich and the Republican controlled General Assembly pushed through a biennium budget that slashed the Local Government Fund. As a result, governments at all levels are being forced to cut spending and find new sources of revenue.

A 6 percent pay raise in Girard — it goes into effect in 2012 — just seems ill conceived. Why not put the money in a rainy-day fund?