Pay raise proposal a political football

3.2 percent raise for civil servants debated

The twice-given and twice-rescinded 3.2 percent pay increase for civil servants has been put forward again just ahead of the government’s 2014/15 budget being presented to the Legislative Assembly, with the country’s premier stating it won’t happen in time for the next budget.  

The Caymanian Compass has confirmed that Deputy Governor Franz Manderson proposed, via a memo sent March 28 to Governor Helen Kilpatrick and Cayman Islands Cabinet ministers, that the pay increase be reinstated in January 2015 – midway through next year’s budget.  

Such a move would add $2.5 million to Cayman’s annual operating costs, but it was understood that the memo proposed a number of ways those costs might be made up through reduced spending.  

Mr. Manderson declined to discuss the contents of the memo when contacted for comment Tuesday. The Cayman Islands Civil Service Association confirmed the existence of the memo and that the organization is behind the deputy governor’s proposal “100 percent.”  

“We are most definitely in support of the deputy governor’s request,” association president James Watler said. “It could be sooner, but we don’t have a problem with it [coming into effect in January]. 

“I know some in the general public have perceived civil servants as ogres, but the average civil servant is living on a salary from 2007-2008,” Mr. Watler said.  

Asked about her position on reinstating the pay increase, Governor Helen Kilpatrick said, “It is not practical to sustain a pay freeze indefinitely, but any decision on when the freeze for Cayman Islands civil servants should end is one for [government] to take.” 

While discussing a number of issues related to planning for the upcoming budget with the Caymanian Compass on Monday, Premier Alden McLaughlin noted that the 3.2 percent increase for all central government workers’ base pay has already been ruled out for the upcoming year.  

“We’ve already told the [civil service], it’s not going to happen in this [2014/15] budget,” Mr. McLaughlin said Monday. 

However, the premier did not rule out increasing the pay rate in subsequent spending plans if the government is in good financial health and could support such a move.  

The history of the 3.2 percent cost-of-living pay increase for civil servants, first awarded in 2008, has been somewhat tortuous.  

The pay hike was taken away from civil servants as a temporary measure during the first year of the United Democratic Party administration after it was revealed local government was facing an $81 million operating deficit from the 2008/09 budget inherited from the previous People’s Progressive Movement government.  

When public sector finances improved later in the UDP’s administration, then-Premier McKeeva Bush reinstated the pay increase, only to have it cut out of the budget again the next year due to further financial difficulties. 

The Cayman Islands has budgeted to end the 2013/14 fiscal year with a $100.3 million operating surplus – meaning government revenues will be much higher than expenditures for the year.  

However, even if government reaches that figure, it is anticipated that only $22 million will be left over once the costs of paying off debt principal and capital projects are subtracted from the operating surplus.