Tennessee state employees are demanding a 7 percent raise in next year’s budget. But with only three weeks before the November election and another tight fiscal year ahead, neither candidate for governor says that kind of across-the-board salary bump is realistic.
At a time when most hopefuls in competitive political races are trying to sell voters on their ability to restrain government spending, the state employees’ association says it will push for a pay increase anyway — and promises to hold lawmakers who balk at their demands accountable in 2012.
“I personally will be shocked if the Legislature does not come up with a pay raise for state employees,” said Robert O’Connell, executive director of the Tennessee State Employees Association. “It’s not a wild, radical idea. It’s just time.”
State workers have gone three years without a raise while the cost of living has increased by 6.9 percent, according to O’Connell.
Every percentage point increase in pay costs the state about $50 million, according to the Department of Finance and Administration. A pay-hike of the sort the government workers’ union is demanding would run about $350 million.
But just last week, Gov. Phil Bredesen’s administration collected proposed cuts of up to 3 percent from each department in order to slash between $45 million and $160 million from the budget should the economy take a nosedive.
“We’re not sitting here with rose-colored glasses on. We see their (revenue) predictions,” O’Connell said. “But that doesn’t mean we’re not presently on the road to recovery. We are.”
September revenues came in 6.14 percent, or $977 million, higher than expected, according to the Department of Finance and Administration. The increased tax collections follow two years of consistently lackluster revenues that repeatedly failed to meet expectations.
But with Bredesen leaving office in January, it’ll be up to the next governor and a new band of legislators to pass a budget, and decide whether it makes sense to extend a significant raise to the state’s 43,000 employees.
Republican Bill Haslam, who polling suggests is the clear front-runner in the race for Tennessee governor, is sounding hesitant on the raise issue — at least at the level the union is talking.
“To be frank with you, I don’t see that being realistic in the next year or two,” said the two-term Knoxville mayor.
Haslam believes state employees deserve a raise and said he would try to make that happen. But he’s unwilling to commit to 7 percent.
Same goes for Democratic candidate Mike McWherter. “A 7 percent increase in almost any company — privately-held or public-sector right now — would be very difficult to achieve unless the revenue picture just drastically turns around, and I don’t see that happening,” he said.
Nevertheless, McWherter said giving state employees a little something extra — a smaller raise or maybe a bonus — would be a priority under his administration. And he went out of his way to declare his solidarity with the union during the Knoxville gubernatorial debate last week. The first thing the Jackson beer distributor and son of a former governor said he would do upon assuming the state’s chief-executive job would be to “join the Tennessee State Employees Association.”
“We’re going to lose huge institutional knowledge to the private sector if we do not address their needs. I want to join their association so they know I am one of them,” McWherter told the audience at the University of Tennessee.
In addition to larger paychecks, the association wants the state to split employees’ health care premiums down the middle, which would cost another $54 million, according to the association.
Health costs for state employees have climbed 6 percent to 9 percent a year for the last three years, according the TSEA, and without a raise, workers have had to pay the increases on their own.
But even with the out-of-pocket contributions from state employees, Bredesen was observing that Tennessee taxpayers’ share of government workers’ medical coverage represents “a big pot of money.”
State employees salaries and benefits rung up at an estimated $2.8 billion last budget year, according to the Department of Finance and Administration. The total state budget for fiscal year 2010-11 is $29.8 billion.
In the current economic environment, state employees who don’t get laid off ought to count themselves lucky to have a steady job, said Stacey Campfield, a House Republican from Knoxville running for state Senate. Government employees insisting on raises now is a little impractical, he said.
“They can look for a 7 percent raise next year, but I’m looking for a unicorn and a rainbow that drops golden bars from heaven,” he said. They may deserve a raise, he added, but “I just don’t see that as happening,” even at a lower level.
Randy Walker, Campfield’s Democratic opponent, called it “cowardly” to deny state workers annual cost-of-living adjustments. Lawmakers could dig deeper in the budget to find the money, he maintained.
“Zero is unreasonable,” said Walker. On the other hand, 7 percent in one year might be a little much, he added.
State employees’ average pay was $37,727 in the 2008-09 budget year, the latest year available. Private- and public-sector workers throughout the state averaged $40,242 in 2009, according to the state Labor Department. A 7 percent boost would raise average government-employee compensation to $40,367, or $125 higher than the private-sector average.
Tennessee’s most recently reported statewide unemployment rate was 9.6 percent, according to the Labor Department.
While TSEA’s leadership says it’ll fight hard for raises, they’ve been disappointed before. Earlier this month, Bredesen’s administration sent agency directors a letter saying a wave of bonuses intended to hit their bank accounts this fall just isn’t in the fiscal cards.
The bonuses were tied to the state collecting an extra $50 million in tax revenue above what it projected in the 2009-10 budget year. Instead, revenues fell $39 million short of the state’s estimate. Bredesen subsequently cancelled the bonus, which would have given employees $50 for each year of service with a minimum payment of $150 and a maximum of $1,250.
TSEA officials say they’ve chosen to endorse candidates who generally favor raises for state employees. However, O’Connell said, they’ve gotten no guarantee that those lawmakers who they’ve already endorsed this year would support an increase of 7 percent.
“All we can do is exercise any political clout that we may have in the future,” he said, adding that the association plans to ask members to call the politicians it has endorsed and ask whether they support the proposed raises. “We are not expecting that we are going to fail.”
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The TSEA is not a union.
Prior to the meager COA three years ago, most Tennessee state civil service employees had gone for more than 4 years with no raise.
The health insurance restructuring, starting in 2011, will mean that, in some cases, the employee’s take-home pay will decrease by around $150 per month. For a family of 4 that ‘s about a week’s worth of groceries.
A 7 percent increase would mean an extra $200 per month before deductions for the average civil servant which would no ofset the increase in the employee part of the insurance premium for many.
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