State Ledge proposal will cut pay, take jobs from TDCJ employees

By Duane Stuart, Backgate Website

This is the current proposal on the table now with Texas Legislators in Austin. If these initiatives are carried out, it will spell disaster for state employees. Now is the time for those of you that never have, to pick up your phone or write an email to your state Representative. Your career may depend on it.

(0.1) A Ten Percent Pay Cut for All State Employees GR Saving: $0.865 billion
Cutting all state employees' salaries, including higher education employees' salaries, by ten percent ensures that the state budget can be balanced without ending essential services provided to the neediest Texans. As outlined in the introduction to this report, the growth of the public sector in Texas is a driving force behind the current budget shortfall. One of the most effective ways to begin addressing the shortfall is to reduce compensation paid to state employees.

The $0.865 billion saving figure associated with this reduction is illustrative of the impact that a state employee pay reduction could have on the state general revenue budget. In practice, it would likely be necessary to exempt some of the state’s lower-income employees from such a reduction so that they do not become reliant on state programs such as Medicaid or CHIP that would end up costing the state revenue.

(0.2) A State Agency Hiring Freeze GR Saving: $0.496 billion
As noted earlier in this report, Texas has more full time equivalent state employee positions per capita than several other large states, including California, Florida, and Illinois. While Texas is significantly lower than the national average in terms of full time state employee positions, the state spends nearly 15 percent of its overall state budget on salaries and wages, ranking 22nd in the nation and above several traditionally "blue" states, including California, New York, Massachusetts, Illinois, and Pennsylvania .

Initiating a state agency hiring freeze during the 2012-13 biennium will address these discrepancies while helping to balance the state budget. This measure will allow state agencies to keep all current employees but, through attrition, these state agencies will gradually decrease in size and increase in efficiency. By requiring all state agencies to fulfill their mission with fewer employees, we ensure that Except where otherwise noted, the savings estimates in this section were provided by the Office of the Comptroller of Public Accounts. Recommendations outlined are those of the TCCRI State Budget Task Force alone.
our state employees are providing the same value as the rest of the nation. It is important to exclude the Department of Criminal Justice and the Department of Public Safety from a hiring freeze, since these agencies have a direct impact on the safety of the public, which is a core constitutional responsibility.

(0.3) End Longevity Pay for All State Employees GR Saving: $0.323 billion
Full-time state employees are eligible to receive an additional $20 per month for every two years of lifetime service credit up to 42 years. This is effectively a non-merit based bonus which costs state taxpayers more than $323 million each biennium, and continues to grow without regard to need or achievement. Eliminating all longevity pay should be considered in any event given that salary enhancements should never be based on the length of service.

(0.4) A State Agency Overtime Freeze GR Saving: $0.046 billion
An overtime freeze would underscore the point that the state must live within its means as a result of the budget shortfall. Agencies should complete their core mission without resorting to overtime, where possible, although it would likely be necessary to exempt the Texas Department of Criminal Justice and the Texas Department of Public Safety because the services they provide directly affect the protection of the public and enforcement of the law, which is a core responsibility of government.

(0.5) Initiate a Two-Day per Month State Employee Furlough GR Saving: $0.856 billion
While the value of this reduction would be impacted by the other cuts to state employee pay and benefits recommended in this document, a two-day per month furlough could provide additional savings to the state by reducing employee pay by around five percent and overall payroll costs by almost ten percent.

(0.6) Offer State Employees Early Retirement GR Saving: $0.021 billion5
According to the Office of the Comptroller, the last time Texas faced a major budget deficit, legislators passed a temporary provision that offered state employees over 55 years of age a lump sum retirement incentive package equal to 25 percent of the employee's total regular salary. A total of 13,447 employees took advantage of this option.

Investigating a similar early retirement option for the 2012-13 biennium is necessary given the state's budget shortfall. Taking advantage of an opportunity to cheaply and permanently reduce the state's workforce on a voluntary basis is something that should not be overlooked: the savings in the 2012-13 biennium -- $21 million -- are just a starting point since the state would continue to save money into the future.