Senate Offers State Employee Pay Increase, Program Part Of Effort To Slow "Brain Drain", Cut Retraining Costs

In a continuing effort to prevent Oklahoma's best state employees from jumping to higher-paying jobs in the private sector, Senate budget leaders announced a pay raise program for state employees today.

"The simple fact of the matter is we pay our state employees less to perform the same duties and responsibilities than their counterparts in the private sector do. Consequently, we consistently lose our best workers to better-paying jobs in the private sector," noted Senator Kelly Haney, chairman of the Senate Appropriations Committee.

"That kind of 'brain drain' costs the state money in retraining costs and efficiency. We have to give employees some kind of incentive to remain in state government."

Under the proposed pay program, state employees would receive an additional $75 each month and their monthly benefit allowance would be raised accordingly. Benefit allowance funding is pre-tax money that an employee can invest in dependent health coverage, saving them cash that otherwise would have come out of their take-home pay. Workers will have the option of investing the pre-tax money in benefit options or adding it less taxes to their take-home pay.

Additionally, a $25 a month deferred comp matching program will be implemented to encourage state employees to participate in supplemental retirement savings, similar to a "401-K" account. If an employee chose to participate, the state would match up to a $25 a month contribution to such a retirement account.

"We're trying to address some of the financial needs all state employees face, namely health care and retirement costs," said Senator Angela Monson, chairman of the Senate Appropriations Subcommittee on Retirement and Group Health.

The program will cost an estimated $27 million a year to implement.

The state employee pay plan was announced today by Senator Haney, Senator Monson and Senator Cal Hobson, Senate Appropriations Committee vice-chairman. Senators Gene Stipe, Lewis Long, Larry Dickerson and Trish Weedn also participated in the drafting of the program.

According to the Office of Personnel Management, one of the greatest disparities between the private and public sectors is in the area of dependent health coverage. Many private sector employers pay for all or part of dependent coverage, but the state of Oklahoma is unable to match those efforts. If it is implemented, the program will make state employment benefits more competitive with the private sector.

Another recent survey by Deloitte and Touche estimated that state employee salaries are 13 to 16 percent lower than those of similar workers in the private sector.

"The disparity in benefits and pay levels creates a high turnover in many job classifications and that costs the state expertise and ultimately, money," said Senator Hobson.

"We don't want to be in a mode where we're constantly hiring and training new people. The only way to break that cycle is to reward our employees and keep them in state government."

The Senate leaders say the pay program would be financed with growth revenue produced by the state's expanding economy.

"With growth revenue available on the table, there's no excuse not to offer some kind of reward for our hardest working state employees," said Senator Haney.