The State Worker: Arguments against SEIU Local 1000 pay raises
06/20/2013 12:00 AM
06/21/2013 7:54 AM
Gov. Jerry Brown demurred last week when asked about the agreement he reached with SEIU Local 1000 that includes a deferred 4.5 percent raise for all of the local's 95,000 state workers.
So this column stepped up in his absence, noting that the raise is modest, acknowledges years of furlough pain and will help retain experienced workers.
Now, some arguments against the SEIU deal:
State payroll costs keep rising. From fiscal 2006-07 through 2011-12, the state's cumulative payroll costs rose by nearly $10 billion before inflation, according to a Republican budget analysis. The reason: salary increases.
Many state employees have received raises all along. California state workers receive "merit salary adjustments" when they join state service or get promoted. The step raises generally increase pay by 5 percent annually and top out after five years.
Estimates of how many employees are below the top step range from 20 percent to 44 percent. And for most of those topped out, a sixth step kicks in July 1. It's 3 percent for SEIU workers.
"The drumbeat in the background is that (state workers) haven't received raises," said Senate Republican leader Bob Huff, who wants to tie state pay to performance. "Not true."
Step raises cost untold millions of dollars. From fiscal 2005-06 through fiscal 2010-11, state workers' step increases cost $602 million before accounting for inflation, according to figures provided to the state Republican caucus by Controller John Chiang's office.
During the sunny days of fiscal 2005-06, the state paid $72.3 million for the automatic increases. By the Great Recession of 2008-09, step-raise costs had mushroomed to $124.9 million, then slid down to $111.8 million the following year.
And those numbers don't reflect the true outlays. The Controller's Office counted only the cost of step raises for the July-to-June fiscal year they were given.
Let's say a worker received a $10 monthly step raise in January 2009. The controller's figures count it only through the fiscal year-end of June 30.
"The cost was not carried forward to the subsequent fiscal years," said a controller staff email to Republicans, who passed the data on to The State Worker, "as we have no way to determine this amount without manual workarounds which would take many more weeks to complete."
Retiree health costs are climbing. Retired state workers' health and dental care will cost nearly $64 billion over the next 30 years, according to Chiang. Unlike pensions, the state isn't saving for those future obligations. It's the most expensive way to do business.
If the state set aside just 10 percent of its obligation, it would pay $170 million more this year to shave $2.74 billion off that debt.
Increases in the SEIU contract will cost about $734 million over three years. Wouldn't it be prudent to put a little of that toward retiree health?
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