Budget Proposes Salary Increases

January 13, 2005

Public employees have a fundamental role in the effective delivery of state services, and cost-of-living adjustments are simply part of the state’s cost of doing business. Governor Locke’s 2005–07 biennial budget proposal reflects this belief. The current proposal provides pay increases for all state employees and includes $106 million to fund the labor contracts negotiated under the 2002 Personnel System Reform Act. Under the law, the Governor is required to submit the cost of the agreements for an up or down vote by the Legislature. Rejection of the fiscal terms of the contracts would re-open negotiations.

Non-represented Employees

Another $118 million provides salary increasesn for those employees who are not represented by a labor union, including non-represented employees of state colleges and universities. For these employees, the budget proposal includes a salary-and-benefits package similar to the agreements negotiated with unions.

Health Insurance

Under the proposal, state workers still contribute a targeted 12 percent of their health insurance premium costs, as they do today. But because overall premium costs are going up, individual employees will pay higher monthly costs. The state’s contribution also will rise in the next biennium.

Salary Proposal Details

Applies to all general government employees. Terms vary for higher education employees. Salary increases subject to legislative approval.

Union-represented employees

Receive a 3.2 percent increase effective July 1, 2005. Another increase of 1.6 percent (except Teamsters, who receive 2.9) is provided effective July 1, 2006, until June 30, 2007, when it expires.

Non-represented employees

Receive a 3.2 percent increase effective July 1, 2005. Another increase of 1.6 percent is provided effective July 1, 2006, until June 30, 2007, when it expires.

Salary Survey

For those employees who lag the most behind market rates (more than 25 percent) in the 2002 Department of Personnel salary survey, funding is provided to increase their pay to within 25 percent of market rate.

Job Class Consolidation

For those employees who will be affected by job class consolidations, salary increases will be granted when necessary for consolidation.

Performance Pay

For non-represented employees, the state provides $8 million for performance recognition awards. Participating agencies would require approval of their performance pay plans by the Department of Personnel.