Senate Approves $104 Million Raise For State Employees

The Senate has approved their version of a pay package for state employees, giving them 7% in raises in the coming biennium – 4% in 2013 and 3% in 2014 – totaling $104 million:

Bismarck, ND – North Dakota Senators have adopted a negotiation between House and Senate leaders regarding state employee pay and retirement benefits.

The $104 million increase in salaries, retirement and health insurance is included in House Bill 1015, the budget for Office of Management and Budget.

The Senate’s position on the pay package was similar to the Governor’s proposal, the House’s position was less and included no increase to the retirement fund.

The agreement now is a 4% increase in 2013 and a 3% increase in 2014.

There is also a 2% increase in contributions to the state employee pension funds, which are in woeful condition. This was a point of contention in the House, where legislators killed an increase in pension contributions. That increase is cast as 1% from the taxpayers and 1% from the employees, but since the taxpayers pay both sides of that equation, it’s really just a 2% increase from the taxpayers.

State employees are also getting a $95/month increase in contributions to their health insurance plans.

These are some pretty lavish increases, though proponents argue that they’re necessary to keep up with raising pay levels across the state driven by the state’s strong economy. Of course, the problem with that theory is that private sector pay will come down if the state’s economy slows. Pay for state employees never comes back down.

Anyway, the Senate version of this bill now goes to conference committee. Pay for state employees is always a big sticking point in the legislature as it impacts pretty much every other budget being considered. Nothing can be finalized until pay for state employees is a settled issue, as former House Majority Leader John Dorso pointed out recently here on SAB.

Once the two chambers reach an agreement on state employee pay, things will begin moving very quickly down in Bismarck.