For the first time in five years, 5,000 city workers will receive pay increases that outpace inflation -- at a cost of $4 million to the city.
Despite the cost, city officials who negotiated the contract say they don't begrudge the 4 percent pay raises, which exceed the current 3.2 percent rate of inflation.
"I think it's a good agreement," said Labor Commissioner Melvin Harris, who negotiated the agreement for the city after first proposing an increase of between 1 percent and 2 percent.
In the contract that was ratified Sunday, city workers who belong to three locals of the American Federation of State, County and Municipal Employees will receive 4 percent increases retroactive to pay periods beginning July 1. Workers making less than $20,000 will get raises of $800, which would be more than 4 percent.
Over the past five years, wages for city workers have trailed inflation by an average of about 1.5 percent and workers went without raises in the 1992 and 1993 fiscal years, when the city and state were locked in a tight fiscal crunch.
City officials acknowledged the pay increases will cause difficulty in some departmental budgets. Agencies affected by the raises will have to absorb the costs, said Edward Gallagher, the city's budget director.
Mr. Gallagher noted that the city has held personnel costs in check in recent years, confining new hires mostly to police officers, firefighters and teachers.
City administrators say they continue to take measures to keep the city's budget in balance, and elected officials are looking for ways to reduce city property taxes. The 4 percent pay raises for AFSCME employees is worth a nickel in the city's property tax rate -- each 5 cents in the $5.85 rate on assessed value generates $4 million in revenue.
The new contract could end up costing more than $4 million. In addition to the pay raises, employees with more than 30 years of continuing service will receive 2.5 percent longevity increases. They also will be allowed to seek reclassification of their jobs, which would bring more pay if approved by the Baltimore Civil Service Commission. City officials said they did not compute the potential costs of reclassification.
A tax watchdog said he was more concerned with the number of city employees than with pay raises.
"We're not against raises for competent people," said Daniel J. Loden, president of the Baltimore City Homeowners' Coalition for Fair Property Taxes, which monitors city spending. "If the city can be operated efficiently with fewer employees, the competent people deserve raises commensurate with their skills."