The city of Irvine enjoyed an uptick in sales tax revenue and added revenue from hotel taxes this year that accounted for an increase in revenue of $14.4 million in an unanticipated surplus for the most recent fiscal year. The city council majority voted last week to extend a small portion of this unanticipated revenue in the form of bonuses to all city employees (no bonuses for council members) in amounts of $100 to $500 depending on employee’s job status (full time versus part-time with part-time bonuses allocated based on the number of hours worked weekly).
The move was opposed by Council members Steven Choi and Jeff Lalloway. And it has to be very hard for these men to walk the corridors of Irvine City Hall with employees knowing that they voted against what amounts to a small Christmas bonus that most employees will likely put right back into the local economy.
Republicans routinely suggest that government needs to run like a business; the phrase takes on an almost zombie-like approach. But don’t smart businesses seek to grow and expand? Don’t businesses seek to turn a profit? Don’t businesses often pay their senior management astronomical compensation packages of salary, bonuses and stock? And don’t smart businesses reward employees for a job well done when they can?
It’s been a tough economy for everyone these past few years. Irvine’s headcount is lower by about 70 employees who have left or retired this year. These positions were not replaced. Tere were no layoffs and no city services were cut all the while, Irvine’s population continues to grow. So as we pointed out before, Irvine has significantly more people who are residents today than in 2000 when the Republicans were last in the majority. And while the number of city employees has expanded since then, there are fewer city employees per resident today than there were 11 years ago with no cuts in services (actually several notable expansions).
From the Daily Pilot story:
The council awarded $500 to each full-time employee, $250 to part-time employees with more than 10 hours per week on the clock, and $100 to part-time employees who worked less than 10 hours per week.
“It’s not a lot of money, but it says to every employee, ‘We recognize that we’ve been through a tough time together,’” Councilman Larry Agran said. “It is not a bonus; it is recognition of the tough times, the harder work, the smarter work, that has allowed us to restore ourselves to a position of being whole.”
“It is very difficult to sit in front of our city employees and to object to that type of recommendation as a bonus compensation [for] a good job well done,” Choi said at the Tuesday meeting. “But for me, I’d rather be more cautious than celebrating with the temporary surplus.”
That surplus is the not-yet-allocated $454,691 of a nearly $14.4-million surplus in the general fund year-end report.
The unexpected funds in part came from a 15% increase in sales tax revenue and a 14% increase in hotel tax revenue, according to a staff presentation.
Lalloway suggested that the money be added to the city’s insurance fund, or to its contingency reserve fund, which the city targets to match 15% of the general fund.
“I think it sets a rather poor precedent to give away taxpayer money when so many in the nation are struggling right now,” Lalloway said Thursday.
Now both Choi and Lalloway operate small businesses in the city. I have to wonder – do either of them ever give their employees a raise? A bonus? Or do they operate their business on the premise, “you’re lucky you have a job in this tough economy.”
The bonuses allocated to Irvine city employees is a one-time expense to people who work hard and earn every penny. Many are middle class and will likely use the bonuses at local stores for holiday shopping. And the city council will be placing more than $13.8 million into other uses, so carving a small slice of unexpected revenue to reward employees is hardly an irresponsible use of funds.
But back to the notion that “government needs to run like a business” for a moment: “Businesses exist to be profitbable. If they don’t make money, they are out of business. They provide goods and services to others when they can make money at it and price these goods and services to make a profit; at times, the costs of salaries is factored in to the price of goods and services (which is why you pay more for Heinz ketchup in the stores than the store brand which costs less but tastes exactly the same). Governments provide goods and services for the public—things that voters and taxpayers have decided are people’s right to possess and serve the greater community. Government in inherently an unprofitable enterprise (does government profit from War? If it does, should it? Does government profit by running prisons? Does government profit from issuing proclaimations?).
Irvine Republicans loudly complained when the city council majority approved a small measure in increase the minimum wage for work paid for by the city to $10 an hour. The sky hasn’t fallen. Irvine’s balance sheet remains one of the strongest and best of all municipalities in Orange County. Our city workers — only 22 percent make six figures compared to the more than 50 percent in nearby Santa Ana — deliver outstanding performance ever day.
It’s time for Republican politicians in general, and Republican Irvine city council members in particular, to start recognizing that “running Government like a business” is antithical to their core beliefs.