During my 30 years of state employment, modest salaries were generally offset by benefits. Base salary cost-of-living-adjustments were usually below the inflation rate, but health insurance coverage, retirement benefits some 30 years out, and additional paid holidays were granted in compensation.
Please recall that the 6% retirement contribution used to be the employee's responsibility. At the end of the six-month probationary period, the new employee was given a one-step pay increase to offset the initiation of retirement contributions. During salary negotiations in the mid-1970s, employees agreed to freezing their base salaries while employers agreed to pick up the retirement contribution -- in essence, putting more money in the hands of the employees without increasing payroll taxes. At the time, it was a win-win situation.
Also consider that state employee compensation is generally two years behind real world circumstances. Salaries and benefits negotiated during a flush period will be in effect for the biennium, regardless of economic downturns. Conversely, salaries and benefits negotiated during tough economic times will remain modest for the biennium despite an economic rebound. Anyone remember the "Dot Com Boom" of the 1990s? I do -- my salary was frozen while the economy soared.
My suggestion for the governor and legislature is to eliminate the income tax "kicker" and place the money into a rainy day fund. Employees should once again make their own 6% contribution to their retirement accounts after a one-time 6% base salary increase (turn back the clock to the 1970s). State employees will have to bite the bullet and pick up more of their medical insurance premiums.
Just because the recession has put private sector employees out of work doesn't mean work loads have lightened for state employees. The state statutes haven't gone away. Demand for public services has exploded for some agencies. Furlough days only create taller stacks of work on desks.
State employees will have to make concessions during tough economic times, but they shouldn't be political scapegoats to assuage the frustrations of the private sector.
posted 2 years, 11 months ago
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