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Should State Employees Get a Pay Raise?

montana

Former State Representative Tom Burnett joined me to talk about the Governor’s budget, particularly what fat can be cut.  Bullock’s proposed budget is $11.5 billion over two years and relies on nearly half the revenues from Washington, DC.  It reportedly represents an increase in spending of 13% and includes:

  • an over $1 billion in increased spending in health and human services including the expansion of Medicaid by $750 million in federal funds
  • a pay increase of $80 million
  • an increase in state employees by 184.
  • $100 million in building funds mostly for new buildings on college campuses
  • $100 million to fight fires

Burnett challenged the pay plan. Bullock is proposing a pay increase of 5% for each of the next two years. When compounded, that means a pay increase of 10.25%. This is in addition to the “longevity increases” that state employees qualify for after five years.  Despite the so-called pay freezes of the last biennium, Burnett discovered that nearly all the salaries of state employees he checked, nearly everyone got a raise.  One got a raise as high as 11.4%!  The question is, that during times of economic challenge when many Montanans are tightening up their fiscal belts and are glad to get decent paying jobs, our state government is proposing raises to its own.

A pay raise to cover the rate of inflation for those who don’t qualify for longevity increases is one thing.  That would amount to a 1.6% raise.  But 5 percent?  Sounds pretty high especially when you factor in Montana’s unfunded liabilities.  According to testimony provided by Eileen Norcross of the Mercatus Center delivered before the Montana Joint Select Committee on Pensions on February 14, 2013, the unfunded liabilities is as high as $11 billion. Shouldn’t we be developing more aggressive plans to pay off these liabilities and fix the broken pension system?  Burnett talked in great detail about the guaranteed return pension plans of state employees–teachers, firefighters, police and others.  Is it right that some public employees get a guaranteed return of over 400%?  We love our public servants but can we truly afford this generosity since it is coming from our taxpayer pockets.  Check out the audio here and let me know your thoughts.

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Henry Kriegel broadcasts weekly on Thursdays at 9:00 AM on KMMS AM 1450 Bozeman, KPRK AM 1340 and is streamed live on the web at www.kmmsam.com.  You can tweet Henry @henrykriegel, facebook him or contact him by email at henrykriegel@gmail.com.

 

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