State workers get most pay back
June 30, 2013
It's not exactly a raise, but beginning with their next payroll check, state workers will get what they most wanted from the state's new budget.
Lawmakers voted in the 2013 session to restore the 2.5 percent pay cut imposed on state employees for the past five years.
All in all, workers lost nearly 5 percent — half in a direct pay cut and half through furlough days.
Both Democrats and Republicans agreed in May their goal was to eliminate those pay cuts rather than eliminate the unpaid furloughs as proposed in Gov. Brian Sandoval's budget.
Sandoval, who said when he unveiled his budget that he wanted to do as much as possible for workers, agreed to the change. According to Director of Administration Jeff Mohlenkamp, the decision to eliminate furloughs was a management choice because doing so would mean more people on duty providing services in the different agencies on any given day.
Lawmakers, however, sided with state workers who said that while Sandoval argued businesses couldn't take any more taxes, he imposed what amounts to a tax increase on them by reducing their pay. They opposed the elimination of furlough days, saying that at least with the furloughs, they got something — a day off.
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Eliminating the furloughs, however, costs nearly $25 million more than the governor's plan — a total of about $70 million over the biennium.
Senate Finance Chairman Debbie Smith, D-Sparks, said when the proposal was unveiled that there were several pots of money available to help cover that cost, including the $47 million the Economic Forum added to projected general fund revenues over the biennium. But she promised state workers would be pleased when the final pay bill rolled out.
Workers won't, however, see a 2.5 percent increase in their take-home pay, because even as the government giveth, the government taketh away. The take-away that also hits in July is an increase in the Public Employee Retirement System premium rate of 1 percent each from the state and from the employees.
Mohlenkamp said, however, that the restoration means at least they won't see paychecks shrink further to cover the PERS premium and will still see paychecks grow by 1.5 percent.
He said it was an all-out effort to do that much in what is still a fragile and slowly recovering economy.
A large part of the actual funding to cover the restoration will be covered by salary savings — money budgeted but unspent by the various agencies created when positions are vacant while managers are trying to replace workers who leave or retire.
In addition, there was some money freed up by various gubernatorial and legislative amendments to the original budget.
"When we did all the amendments, we still hadn't spent all the money," he said.
Still, there wasn't quite enough though cash available to cover the shortfall, so lawmakers had to dip even further into the state's rainy-day fund. Sandoval's budget tapped more than $84 million out of that fund, leaving just $15 million in case of emergency. The additional taken for pay restoration will reduce that emergency fund to about $7 million.
To make sure there is enough to cover the cost, the so-called pay bill includes $32 million in general fund and $3.7 million in highway fund money set aside in a special account. Toward the end of each fiscal year, Mohlenkamp said agencies will first use any savings they have to cover payroll costs. When that runs out, they can approach the Board of Examiners, which will make up the difference from that account.
As for whether all the cash will be there when needed, Mohlenkamp said the good news is that FY 2013 revenues are ahead of projections "by tens of millions." The continuing concern, however, is that the state still hasn't seen the full impact of the federal budget and sequestration.
In addition to the pay cuts, state workers lost their merit and longevity pay, endured significant reductions in their health benefits and lost several smaller benefits such as shift differential and supplemental pay for such things as being bilingual and working in rural assignments.
Sandoval's original budget proposed restoring step and merit pay in the second year of the biennium, fiscal year 2015, and lawmakers kept that provision in the final budget.