Sep 30, 2008 - 04:05:22 CDT
When the State Employee Compensation Committee recommended recently that brackets or ranges for pay grades be raised by 8.1 percent and state employees get 4 percent raises in each year of the next biennium, the initial reaction was weary surprise. It seemed, for the moment, that the state's revenue surplus, more than $1 billion, would be spent before it was collected or worse.Actually, it's not a done deal or even close. And, there's more merit in the salary recommendations than initial impressions suggested.
The compensation committee's proposal marks the beginning of a long, multi-step process that isn't complete until both chambers of the North Dakota Legislature agree and the governor signs the action into law. We are five or six months and many hours of debate away from that happening.
However, the proposed salary increases, along with a growing wish list for state spending, offer a heads-up for what's coming in the campaign season and in the Legislative session.
Back to state salaries. The compensation committee usually meets once a year. It's made up of four legislators, four state employees (who are elected) and a chairperson appointed by the governor. And it is to the governor that the committee makes its recommendation. The governor may or may not incorporate the recommendation into the budget he submits to the Legislature, which must then survive the lawmaking process.
Gov. John Hoeven has hinted that the recommendation runs a little high. And he might choose to adjust the state's pay grades, as they compare to job markets, in a different fashion.
So that's that. The numbers themselves the 8.1 percent for catch-up and 4 percent each year of the biennium come from a division in the North Dakota Office of Management and Budget. The state's civil service structure has 20 pay grades, and for the lower half, local Job Service numbers are used for salary comparison with the private sector. For the rest, comparisons are done with state governments in 10 states in the Midwest. The idea is to come up to 95 percent of private sector pay for a specific state job. Assuming a good faith effort by state analysts, these comparison should provide the governor and lawmakers with solid information for setting state pay.
A very rough $76 million was suggested as the cost for the recommendation. A little more than $20 million would be for adjusting the pay grades, about $23 million for the 4 percent annual raises and between $25 million and $30 million for increases in health insurance premiums, with the state paying 100 percent of the policy, although it requires deductions and co-pays. Benefits are always very hard to quantify when making market comparisons.
Whether people view this package as high or not, it's clear that the state's job market is uncertain. Wages are going up rapidly in some sectors, and not at all in others. In the west, where oil pushes unemployment down, salaries are high. But that's not necessarily happening in non-energy businesses. It's a real mixed bag, and it has to make recruiting and retaining state employees challenging.
It's likely the governor will propose something different that the compensation committee's recommendation, but it would be surprising if the costs will be radically different. Of course, the Legislature has a mind of its own, but again, reducing the price tag will be a challenge.
DW wrote on Oct 5, 2008 2:26 PM:
kk wrote on Sep 30, 2008 9:05 AM:
I would think that it is time to think about HELPING THE PEOPLE with lower taxes-property etc~ and how about the medical insurance rape in ND? "
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