State employee pay

Near the end of last session I wrote an update in which I opined against the political grandstanding conducted at the end of this year’ session. Various politicians sought to make political points by attacking the new state budget on the grounds that it did not contain across the board pay raises.

State Reprenstative Jason Murphey

Making policy in the heat of the moment makes for the worst kind of policy and I appreciate those who didn’t cave to political pressure but favored a deliberative approach to the issue.

The issue of state employee compensation is incredibly complex. Depending on their specific position, state employees may or may not be compensated at the equivalent of comparable private sector positions. No one can dispute that the state employee benefit package is incredibly generous. Many employees receive so much in benefit allowance that they not only receive their entire benefit package at no cost, but they have money left over which they can keep. This contrasts to private sector counterparts who are often required to pay for part or all of their benefits.

Additionally, the state still maintains an antiquated defined-benefit retirement program. This plan is funded by an extremely rich employer contribution. It has been especially kind to former elected officials who in some cases may receive a bigger check in retirement than when they were working.

This system does not work. Because the retirement system is rich but not transferable, a golden cage develops into which the employee is trapped for a long period of time. Because so many other employees are also trapped, it can become difficult to move up the ranks and earn better pay. It’s really quite a socialistic system that can incentivize employees to keep a low profile and choose not to create waves or speak out, or risk working hard enough to show up the other employees. The crowded golden cage may force the employee to wait for years for the opportunity to advance and earn pay raises. Instead, the employees must wait for the Legislature to give them more money. And because the retirement isn’t transferable, it is difficult to ever escape the cage. Can you imagine a more demoralizing environment in which to work?

Compare this with the private sector where a hard working employee can quickly move up the ranks based on good work ethics and innovative ideas. When he cannot move up in the company due to management incompetence or lack of room to advance, he can take his retirement plan with him and transfer to a company which has an environment conducive to advancement. This naturally attracts the hard working and innovative.

One state official told me of his enthusiasm for the inevitable state transition to a defined-contribution retirement plan. He believes this will be an invaluable tool for opening up and transitioning the environment of his agency as he will be empowered to recruit those hard working individuals who want to get experience but don’t want to be required to stay in a lifetime of government work.

Many know and understand these facts. It is only a matter of time before an omnibus state employee compensation and benefits package is advanced to transition state employees into an environment more like the private sector. I believe this proposal should make compensation and benefit allowances comparable to the private sector where raises are earned based on performance instead of across the board raises through legislation. This will take some of the politics out of the employee compensation policy.

It was initially thought that this transition could take place during the last session and in one of my articles from last month I referenced that effort. However, legislators decided to wait one more session to see the results from a state employee compensation study requested by Governor Mary Fallin. This study should provide valuable input as we look toward the future transition which I would like to see happen during the next legislative session.

It is absolutely the right thing to do for state employees and the taxpayers they serve.

Thank you for reading this article. Your interest and input are much appreciated. Please do not hesitate to email Jason.Murphey@hd31.org with your thoughts and suggestions.