Hattiesburg City Council members have approved a $158.1 million budget for Fiscal Year 2024 that will include pay raises for first responders and no increase in property taxes for residents – and in some cases, a decrease in that instance.
However, Mayor Toby Barker does see some upcoming challenges with the Public Employee Retirement System of Mississippi, which provides retirement benefits for individuals working in state government, public schools, universities, community colleges, municipalities, counties, the Mississippi Legislature, highway patrol, and other such public entities. The budget was presented by chief financial officer Malcolm Berch during an August 22 public hearing, before being approved by a 5-0 vote at the September 5 council meeting.
“I think this … continues to take steps for our employees, to make sure that we’re having competitive salaries that can recruit and retain people who provide services for the city,” Barker said. “Whether that’s firefighters, police officers or people who drive our mass transit buses, sanitation drivers, tree crew cemetery workers – all of those things are important.
“So you have to continue to invest in those people, because you want to keep good people here and get people to come here. But I think we need to be very honest with our residents … that this PERS situation is going to be really dire in a couple of years.”
The budget will raise starting salaries for firefighters from $32,000 to $40,000 per year, in addition to updating the pay scale giving additional pay for longevity, education and rank. It also provides a $1 per hour increase for fire inspectors.
It also will raise the minimum wage for cemetery crew workers to $15 per hour, tree crew equipment operators to $18 per hour, sanitation crew workers to $14 per hour, court clerks to $14 per hour and mass transit drivers to $18.50 per hour. Code enforcement officers will receive a $1 per hour increase, and personnel in the Water and Sewer Department will receive a year-of-service increase.
Those salary raises are in addition to the budget amendment from June that accommodates for an increase in starting pay for police officers from $40,000 to $50,000 – with additional pay for educational attainment and rank – and a raise in the minimum wage for sanitation drivers to $18 per hour, along with a $2 per hour increase for drivers.
“A big focus of our budget this year has been, how do we get first responder salaries to be competitive with others in the area?” Barker said. “The city council dealt with this over the summer.
“Taking the starting pay to $40,000, on top of the pay scale we’ll have, puts us in that league (with other areas).”
All city employees are enrolled in PERS as a part of its full-time benefits package. Currently, state agencies, cities, counties and school districts pay 17.4 percent into retirement for each employee.
On August 22, the PERS Board voted to lower its assumed rate of return, as officials do not expect to make as much money through its investments. To make up for that loss in revenue, they also voted to increase employer contributions to 22.4 percent.
This equates to a 28 percent increase in the city’s retirement costs. If the city were to make up for it all at once, those totals would be approximately $1.5 million in contributions for the existing employees.
“We know there’s a PERS situation on the horizon, and we hope the Legislature will help us out with that,” Barker said. “I think we’re okay this year, and we’ll probably be okay next year, but when you get employee contribution rates beyond 23 percent, that’s when there’s going to have to be some hard conversations.
“The cities, the counties and the school districts will all be dealing with the same thing.”
The $158.1 million budget is up from last fiscal year’s $140.49 million and includes, among other items, $63 million in the general fund, $30.2 million in special projects, $32.4 million in capital projects and $59.87 million in water/sewer. The general fund breakdown includes, but is not limited to, $12.63 million for administrative costs, $15.18 million for police and academy, $11.5 million for fire, $37.88 million for personnel and $14 million for public services.
The tax levy for Fiscal Year 2024 is 118.75 mills, including 56.13 mills for the City of Hattiesburg and 65.62 mills for the Hattiesburg Public School District. That’s compared to the millage for Fiscal Year 2023, which was a total of 119.21 mills – 53.13 for the city and 66.08 for the school district.
One mill is equal to one-tenth of a cent. To calculate property tax, divide the millage by 1,000 and multiply it by the property’s assessed taxable value.
For example, if a city were to institute a .64 millage increase, the owner of a $100,000 home would pay an additional $6.40 per year in property taxes.
“City millage will stay the same, so peoples’ property taxes shouldn’t go up,” Barker said. “In fact, if they live within the school district, (the taxes) should go down.”
The budget also accounts for continued investment in paving and drainage, as $2.9 million is allocated for neighborhood paving. That number does not include some of the bigger projects that are already underway, including infrastructure grants through America Rescue Plan Act Funding and Mississippi Municipality and County Water Infrastructure Program, with more than $20 million allocated for infrastructure projects.
