A budget presented to Myrtle Beach City Council this week would keep taxes and fees the same, with the exception of a rise in water and sewer charges.
Those fees would increase by a maximum of 2.8 percent, or about $1.23 per month for the average residential user.
The city’s goals for increasing employee salaries could take a hit, however, as the South Carolina General Assembly is expected to start charging public employers more for the state’s pension fund.
Those increased costs would either eliminate or delay across-the-board raises for most Myrtle Beach employees.
Under current proposals, the state would raise pension contributions by either 1 or 2 percent. At the low end, most Myrtle Beach employees would receive a raise of 1.75 percent starting at the beginning of 2018; at the high end, salaries would stay flat, City Manager John Pedersen said.
The city implemented a new system of employee raises last year, when most staff received a 4.25 percent raise and a potential additional merit increase of 0 to 5 percent. The merit raises are unaffected, Pedersen said, but the goal was to give most employees a baseline raise in July.
State-level lawmakers are expected to resolve what the increased burden will be within the next few months. Public employees may also be required to contribute more to the system. The cost to the city to cover the maximum combined raise of 2.3 percent would be an estimated $936,000.
South Carolina could raise employee and employer contributions to its public pension fund by 2.3 percent this year, which would cost Myrtle Beach $936,000.
“We should have this [amount] resolved before the budget has to be passed,” Pedersen said.
Councilman Phil Render praised city staff on Tuesday for proposing a budget that grapples with increased pension obligations.
“That is a big deal not to have to come to us for a tax increase to have to cover this,” Render said.
Last year, Myrtle Beach’s enacted budget of $188.5 million raised property taxes, water and sewer fees and created a container fee for solid waste customers. It also raised business license fees, which would stay unchanged under the 2017-2018 budget.
The current budget proposal totals $190 million.
City council typically approves a budget in late June. The new budget would go into effect July 1.