In recent months, there has been significant discussion regarding the City’s repeal of collective bargaining. Opinions have varied widely, particularly around its impact on both the financial health of the City of Salisbury and the financial protection of City employees.
As Mayor, I believe it is important to clearly explain both my reasoning and that of the Council that led to this decision.
First, it is critical to understand the basic financial realities of the City. Each year, total revenue increases on average by approximately $2 million across all sources. This increase represents the full “footprint” available for new spending in the upcoming fiscal year.
Labor costs—payroll and benefits—make up roughly 70% of the City’s total budget. Obviously, this means even modest pay increases have a significant financial impact. For example:
A 2% raise would add approximately $750,000 in new reoccurring costs (38% of new funding)
A 4% raise would add approximately $1.52 million (75% of new funding)
Obviously, new raises need to be balanced along with all other cost increases—including rising insurance premiums, utilities, inflationary pressures, and capital improvements such as parks and playgrounds.
Despite competing priorities, wage negotiations have created a significant financial challenge in just two years of collective bargaining among the three bargaining units. In the last two fiscal years (FY25 and FY26), the city entered into agreements providing 6% annual raises, even though revenue growth supported approximately 3%. This is despite all bargaining units seeking 6-12% increases. The difference between a sustainable 3% increase and the negotiated 6% increase added approximately $1.2 million in recurring annual payroll costs.
So you ask: Why would the city agree to these increases? Simply said, pressure! Pressure came in two forms. Because unresolved negotiations would proceed to binding arbitration, the City faced additional legal costs and uncertainty regarding the outcome, as the arbitrator may have a very different view of affordability, which is binding.
Moreover, the issue is not negotiating with one bargaining unit—it is negotiating with three simultaneously. For a small municipality such as Salisbury, the financial and operational risks are significantly greater if multiple negotiations proceed to arbitration. An unfavorable outcome in all three cases could create substantial budgetary pressures, reduce flexibility in managing resources, and have long-term impacts on future labor costs.
To put these agreements in perspective:
A 6% raise costs approximately $2.4 million
This exceeds the City’s $2 million annual revenue increase.
Those agreements created an annual deficit of about $400,000/per fiscal year on the new revenue, which now must be covered using the City’s reserves.
Further, it allowed for NO other investment in public works projects from core revenues.
Outside of reducing services, delaying capital projects, or increasing taxes (which this administration did not want to entertain), the only place for those expenses to be funded is from savings or reserves. Reliance on savings or reserve funds to finance recurring operating expenses is financially unsustainable and represents a significant indicator of fiscal distress. This practice erodes the City’s financial resilience, weakens its long-term fiscal position, and, if continued, could result in negative assessments by bond rating agencies, potentially increasing future borrowing costs and limiting financial flexibility.
Fast forward to this budget year, in the most recent negotiation cycle (FY27), similar pressures persisted. One bargaining unit requested a 12% increase, while another requested 8%. Far beyond the ability to pay. These requests came at the same time Wicomico County finalized a new Sheriff’s agreement, placing additional pressure on the City’s compensation structure—within our police department, where competitive wages are essential for recruitment and retention.
Given these financial realities, the continued structure of collective bargaining—under the current conditions—became unsustainable for the City.
To be sure, our responsibility as leaders is to balance fair compensation for employees with the long-term financial health of Salisbury and our ability to continue delivering improved essential services and capital improvements to residents. I am proud to serve with three council members (Jackson, Dashiell and Holland) who were willing to look at these financial realities and make the difficult decision to do the right thing for the city and the taxpayers of Salisbury.
That said, despite the challenging wage climate, the city is flourishing. Through a host of financial moves like bond reallocation and the pursuit of funded but idle projects, we have a record number of infrastructure projects, parks, and playground improvements in our recent history. In simple terms, we have truly gotten back to the basics that taxpayers expect. Many of these projects will be covered in the “State of City” on July 9th at Salisbury University.
Let me say in closing, people in public office have a very real responsibility, in fact, a fiduciary responsibility to the public. As many communities have truly proven, bad policy compromises even a great city’s ability to flourish. Poor leadership allows it to happen. While defending those resources and taking a stand is challenging, it is very much expected as a community leader. I am confident that we can all agree that maintaining the City of Salisbury’s financial stability is in the best interest of our entire community.
Randy Taylor
Salisbury Mayor
Reader reactions, pro or con, are welcomed at civiltalk@iniusa.org.
