Haslam cancels raises, but averts insurance premium increase

TSEA March 31, 2014 Comments Off on Haslam cancels raises, but averts insurance premium increase
Haslam cancels raises, but averts insurance premium increase

NASHVILLE – State employees’ salaries will not be raised this year, but neither will their health insurance premiums, according to Governor Haslam’s budget amendment which will be released Tuesday morning.

A proposed one percent raise for state employees is no longer funded in Gov. Haslam’s budget amendment; however, the administration did listen to TSEA’s recommendation to use a surplus within our health insurance reserve fund to help workers.

Our health insurance reserve fund is currently 200 percent over the necessary funding. Earlier this year, TSEA met with the Governor to make him aware of this reserve surplus and recommended it be spent on providing financial relief for state workers. The result: The supplemental budget recommends canceling a 5.5 percent health insurance premium increase for this year. This means if this amended budget is adopted state employees will not see an increase to their health insurance premiums this year.

Unfortunately, state employees’ salaries are on the chopping block. According to the Department of Finance and Administration’s March 12 revenue report, state revenue collections were $259.9 million less than the budgeted estimate through February. The removal of funding for raises is due to these under collections.

This isn’t the first time state employees’ pay increases were used to balance the budget. For many years, employees received no increases at all due to budget concerns. Since 2007, the cost of living has increased by 14.6 percent. The cumulative total of state employee raises during that same time period is 8.6 percent. “We understand that we are at a point where cuts need to be made to balance the state budget, but once again the administration plans to balance the budget on the backs of our hard-working state employees by taking their raises away,” said Robert O’Connell, TSEA Executive Director.

TSEA will seek legislative support to restore funding to the budget for a raise. This effort will likely require action on your part by way of phone calls, emails and personal visits to your legislators. Look for a communication from TSEA in the coming days about further action on this issue.