Minimum wage for Austin employees central in budget discussions

AUSTIN (KXAN) — While Austin City Council members voted to raise the minimum wage for its employees to $22 per hour, the city manager’s preliminary budget for the coming fiscal year lists an $18 minimum wage with a gradual increase. There’s a chance the city could split the difference.

During a budget work meeting Tuesday, council learned how much it would cost to pay its employees more. To hit a minimum wage of $18 per hour, it’s going to cost the city roughly $3.7 million, which is already built into the base budget, staff said. The breakdown to increase that hourly pay was laid out in a staff presentation below:

(Courtesy City of Austin Human Resources Department)

Councilmembers talked about splitting the difference at $20 an hour.

“I am very supportive of that. It is $800 a week before taxes and other deductions, once you factor in cost of living, transportation, other expenses, childcare, it really is not in any way an excessive wage,” said Councilmember José “Chito” Vela.

Councilmember Ann Kitchen expressed support for the $20 an hour minimum wage too, pointing to staff shortages in the Austin Police Department’s dispatch team as an example of difficulty retaining and hiring within city departments. She said right now, there’s a more than 40% vacancy rate.

There are staff shortages across the city, councilmembers said, which they hope to be addressed with a rate increase for employees.

Vanessa Fuentes, the councilwoman for District 2, said she would be bringing forward a budget amendment to raise the minimum wage from the presently listed $18 per hour this year.

“While the City Manager has proposed a budget that would set the minimum wage for City employees at $18/hr, it is simply NOT ENOUGH to address our staffing crisis. The fight for higher wages continues!” she wrote on Twitter.

The city manager brought two options back to council after they directed the city manager to up the minimum wage: Both start at $18 per hour starting this year, but option number 1 proposes an increase of $1 per year until 2027, ending with a wage of $22 per hour. Option number 2 proposes an increase of about $2 per year until 2027, ending with a wage of $27 per hour.

The city’s human resources department said they are also working on other recruitment strategies including flexible work schedules, attending and hosting career fairs and revising minimum qualifications for applicants.

Travis County looking to stay competitive

Travis County commissioners also expressed the desire to also raise its minimum wage in this year’s budget.

Right now, Travis County’s minimum wage is $15. Staff talked about bumping that to $18 this budget cycle.

To move all of the people making less than $18 an hour to that minimum, it would cost the county more than $1.2 million, staff said Tuesday. That doesn’t include the money necessary for “compression,” the raise people in non-entry-level positions would get to keep them at a higher tier of pay.

“That’s nothing,” Commissioner Margaret Gómez said of the more than $1.2 million price tag. “I think that we need to really do something for our employees.”

“We’ve never tried to push the floor up by 20% before,” county staff said, noting it costs closer to $5 million to $10 million to move to $18, with compression factored in.

Commissioners asked staff to come back with some options next week. Travis County could also raise salaries for its peace officers and elected officials. The budget process will play out over the next few months.

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