Governor gives his State of the State address; 1% raise proposed for state employees

TSEA February 5, 2014 0
Governor gives his State of the State address; 1% raise proposed for state employees

TSEA was in attendance Monday as Governor Haslam gave his fourth annual State of the State address to Tennesseans. Under the theme, “Tennessee – America at Its Best”, most of the speech focused on improving education in Tennessee, continuing to emphasize the “Drive to 55” – an effort to have 55% of Tennesseans holding certificates or degrees beyond High School by the year 2025. The Governor also announced his “Tennessee Promise”, a proposal to provide all graduating high school seniors the opportunity to attend 2 years of community college or college of applied technology absolutely free.

Governor Haslam only briefly mentioned state employees in his speech. He pointed out that state employees helped the state come in under budget by $80 million last year, and he highlighted the work of the Department of Children’s Services for being “the first in the nation to make support services available to 100% of our former foster youth as they transition to adulthood.” He also said that state employees play the major role in becoming more customer-focused, efficient and effective, proclaiming, “that is why we’re investing in them.” Next, Haslam said employees’ salaries are up nearly 10 percent since 2011, then referenced the recent salary study and resulting salary adjustments.

While not mentioned in his speech, in the proposed budget released Monday the administration recommends a 1% raise for state employees. The Governor’s extensive budget document also states the following:

“A total of 620 positions will be abolished as a result of reductions implemented in this request. At this time, approximately 520 of these positions are vacant. More than one-half of the position reductions are from two departments: Labor and Workforce Development (173) and Human Services (154).”

The budget document goes on to note that of the 100 filled positions which are to be eliminated, 48 are in DCS, 43 are in DIDD, 7 are in Health and 2 are in BOP; however, a more in depth analysis of the budget document may reveal numbers that vary from this initial look.

While TSEA is thankful that Governor Haslam has allocated funds in each of his 4 proposed state budgets for state employees, as well as funding for a salary market study and salary adjustments, sadly, the cost of living continues to outpace our salary increases.

In 2010 the consumer price index (CPI) showed a cost of living increase of 1.5%. The following January, in his first proposed budget, Governor Haslam allocated funding for a 1.6% salary increase. Since then, the numbers are as follows: 2011 CPI – 3%, state employees receive 2.5%; 2012 CPI – 1.7%, state employees receive 1.5%; and this year the CPI is 1.5% with a proposed 1% raise on the table. One could argue that the salary market study and the resulting adjustments make up for the variance in the cost of living, but if one looks at a slightly bigger section of time, it becomes clear that state employees are still suffering from many years without any salary adjustments.

Since 2007 the CPI has increased by a total of 14.6%, while state employee salaries have only increased by 9.6% (that includes this year’s proposed 1%). Since 2007, state employees have lost 5% of their purchasing power, and the trend is headed in the wrong direction.

The Governor urged us to expect great outcomes in everything we do. He also said that Tennessee is America at its best because of common sense, as it relates to our tax strategy. Wouldn’t it be great, and wouldn’t it make sense to expect our salaries to, at a minimum, keep pace with the cost of living? Are we really America at its best when our salaries continue to lose pace with the cost of living?

The proposed budget also calls for $40 million to be deposited into the state’s rainy day fund. In terms of a percentage, the rainy day fund just received a 9% pay-raise.

In comparison, each 1% increase for State Employees and Higher Education employees comes with a price-tag of approximately $29 million.

TSEA hopes the members of the legislature will consider investing a little deeper into state employees by providing some additional relief. After all, we did just save the state $80 million. Let’s expect great outcomes.

TSEA is still in the process of reviewing the proposed budget that was released Monday, and will update you as we learn more. 

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