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Proposal raises state pay without cutting jobs

by Bob Watson | January 22, 2017 at 7:50 a.m. | Updated January 23, 2017 at 4:02 p.m.
Missouri state workers sit in the Truman Building atrium in this March 8, 2014 file photo.

Missouri government has almost 53,300 full- and part-time employees, according to a calculation based on the latest reports on the state's Map Your Taxes website.

The budget passed last spring for the 2016-17 state business year included around 54,000 "full-time equivalent" employees - down about 7,000 FTE from the 2004-05 budget in place when Republican Matt Blunt took over as governor.

And most of those job reductions came in the last eight years, during Democrat Jay Nixon's two administrations, while Blunt's four-year administration trimmed about 2,400 jobs from state government's payroll.

But even with those cuts in the number of people earning a state paycheck, budget constraints since 2001 have kept state employees from gaining substantial pay increases - including several years with no raises at all.

The result has been Missouri state employees' last-in-the-nation status for average paychecks, when compared with their counterparts throughout the country.

Last week in his first State of the State address, Gov. Eric Greitens suggested the solution to Missouri state workers' pay problems is to have fewer workers.

"Our best state employees are being hurt by a big, bloated bureaucracy," Greitens said, adding he's "committed to civil service reform with a focus on making a smaller government that works better for all of our people and will make Missouri a better place to do business."

In his weekly Capitol Report, Senate Majority Leader Mike Kehoe, R-Jefferson City, focused partly on Greitens' comments.

"I have been asked repeatedly if state employees should be concerned for their jobs because the governor also spoke of modernizing technology, increasing efficiency and ultimately doing more with a smaller state government," Kehoe wrote. "My answer is an emphatic NO.

"Government is like any other organization in that there is always room for improvement.

"The vast majority of state employees do excellent work, but there are some that are not pulling their weight.

"Those who are doing their job, and doing it well, need not worry. There is no arbitrary target for the number of state employees, nor will there be a rash of lay-offs of good and productive employees to get to an arbitrary number."

Although Greitens provided no details in his speech last week, Kehoe said the governor's "vision is long-term, emphasizing efficiency and technology to compensate for some of the natural attrition of state employees over time."

Greitens' speech made no mention of the recommendations state officials paid nearly $325,000 to get last summer, from St. Louis-based CBIZ Human Capital Services.

CBIZ studied both Missouri's bottom-of-the-list state employees' pay plan and their slightly-better, but-still-not-great, benefits package - and determined Missouri's state workers are paid on average 10.4 percent below market rates and remain "4.6 percent below market when totaling base salary, incentives and benefits."

The state's contract required CBIZ to look at "comparison base salary data for positions matched to peer roles for the surrounding eight states" - Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas, Nebraska and Iowa - as well as with similar positions in private industry and businesses.

The CBIZ study recommended state officials focus "on the broader market for most of the analysis," instead on the state's last-in-the-nation average-pay ranking.

Among its findings, the CBIZ study noted cost-of-living differences around the state, with 17 metropolitan area counties paying at least 102 percent of the state's overall market value while the rest of the state was below the overall 100 percent line.

Boone County pay is at 96.02 percent of that overall 100 percent line.

Cole and Osage counties are at 94.88 percent.

Gasconade and Maries counties were listed at 94.42 percent - slightly higher than Greene County (Springfield), at 94.30 percent.

The CBIZ survey placed Callaway County at 93.78 percent, while Moniteau, Miller, Morgan and Camden counties in Mid-Missouri all were listed at 93.58 percent.

The survey said those differences could be significant because a state law "prohibits geographic differentials in compensation," but the state could improve some employees' pay by implementing "geography-based wage structures to better align with the respective work location labor markets."

State Rep. Mike Bernskoetter, R-Jefferson City - who chairs the Legislature's Joint Interim Committee on State Employee Wages - reminded the News Tribune last week Missouri's last comprehensive salary/benefits study was in 1983, and he added it was time for an up-to-date study.

He said the CBIZ report provides a blueprint for improving state employees' pay and benefits.

"CBIZ didn't just focus on a state-by-state comparison but the broader market data," Bernskoetter noted. "The majority of people will not move to another state for a job, but they will seek a job outside of state government.

"It's important job seekers realize they should not just focus on the dollar amount they bring home but compare the entire compensation and benefit package the state offers to what private business offers."

The CBIZ study looked at the state's existing pay ranges, then proposed a salary structure tied to "the approximate market median for each job."

Based on that proposal, the study found around 5,050 employees currently being paid below the proposed new minimums and recommended the state improve those employees' pay so they're at least at the minimum pay level.

"The cost to implement the revised structure would be $13,690,388," the report said, "approximately 1.0 percent of the reviewed population payroll.

"This is the cost to bring all employees to the minimum of their respective proposed ranges. CBIZ does not recommend changing salaries for any employees paid above the minimum."

Until 2011, state government paid the employees' contribution to the various retirement plans - and all plans allowed employees to be vested in their plan after five years.

In 2010, the General Assembly changed the rules so, beginning Jan. 1, 2011, new hires would have to contribute 4 percent of their income to the retirement plans, and they would not be fully vested until they had worked at least 10 years.

Also, the retirement eligibility was changed from "80 and out" - an employee's age plus their years of service equalling at least 80 - to "90 and out."

The CBIZ report recommends restoring the vesting requirement to five years, saying the current plan "is out of step with trends in the market. Specifically, most employers are shortening their vesting schedules; the millenial generation has shown a willingness to change jobs often and typically places a much higher value on benefits that vest quickly and are transportable. Additionally, the 10-year vesting creates a challenge in attracting second career employees, who may be deterred by the 10-year requirements."

Bernskoetter also pointed to the CBIZ report's focus "on certain aspects of the Merit System that are antiquated."

He noted Missouri's Merit System - designed to protect jobs from political pressures and to employ people on their skills rather than on who they know - was enacted in 1945, "and the last time there were changes to the Merit System was in 1996."

Bernskoetter said he plans to file legislation in response to the CBIZ recommendations of the Merit System and vesting.

He doesn't predict the success of any bill, even in the Republican-controlled Legislature.


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