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Fewer state employees, but higher paychecks

September 28, 2011

By Andrew Thomason
Illinois Statehouse News

SPRINGFIELD, Ill. — A fractured economy is swelling unemployment figures in Illinois, and a growing number of those out-of-work residents are state employees.

The General Assembly has been forced to deal with less income from taxpayers and, as a result, has trimmed the number of public employees. But those still working in public-sector jobs are earning more, according to an Illinois Statehouse News (ISN) analysis.

Between 2009 and 2010, lawmakers increased the paychecks of those still on the job with the state by $83 million, the ISN analysis found.

Overall, the $3.93 billion in payroll accounted for about 12 percent of the state’s operating budget for fiscal 2010, and was 2 percent higher than in fiscal 2009. Employee pay usually hovers around 10 percent of the state’s operating budget. But that does not include public university employees, whose salary data were not included in the analysis.

Tom Johnson, president of the Taxpayers Federation of Illinois, a government watchdog organization, and chairman of Gov. Pat Quinn’s Taxpayer Action Board, said: “That’s a problem when your revenues are not increasing, (and) we’ve got all this past-due debt that is owed by the state. There needs to be an effort to contain costs.”

To cope with the dwindling income, lawmakers earlier this year gave their OK to a 67-percent hike in the personal income tax rate. Lawmakers also increased the corporate income tax by 47 percent. Quinn signed the tax hikes, which are estimated to bring in more than $6 billion annually.

That new money is chipping away at what was a nearly $15 billion deficit just two years ago, though the state still is struggling to find enough cash to make payroll.

The ranks of employees have decreased through early retirements, layoffs and eliminated positions during the past several years. At the same time, though, pay increased for 95 percent of the state’s workforce by nearly 30 percent because of union-negotiated hikes, said Jim Nowlan, a fellow at the Institute of Government and Public Affairs at University of Illinois at Urbana-Champaign.

This year, Quinn said, legislators sent him a budget that did not fully fund the payroll for 12 state agencies. The Legislature’s action comes after a decade where the number of state employees dropped by about 22 percent from more than 84,000 in 2000 to 69,114 employees in 2010.

The state has been consciously trying to reduce the numbers of employees because of the fiscal constraints under which the state operated. Nevertheless, the pay for state employees represents a relatively minor slice of the total state budget,” Nowlan, himself a state employee, said.

Part of the problem with making payroll comes from a four-year contract signed in 2008 between then-Gov. Rod Blagojevich (D) and public-sector unions, that, despite being amended to defer raises, is causing headaches for taxpayers.

Quinn’s administration is in a legal battle with the American Federation of State, County and Municipal Employees, a union representing state workers, over pay raises for 30,000 employees. Quinn withheld a 2 percent pay hike for 14 state agencies, saying that if the state paid those wage increases, the agencies wouldn’t have enough money to make payroll by the end of fiscal 2012, which runs from July 1 through June 30.

Two cases, one filed in Cook County Circuit Court and another in the U.S. District Court in Springfield on this issue, are pending.

However, a recent report by the Illinois Policy Institute (IPI), a free-market think tank, said state workers are taking home about 16 percent more in pay, not including benefits, than their private-sector counterparts.

It’d be one thing if public-sector pay was way under what the private sector was, but what we’re showing is that we don’t need to provide such large increases at a time, where the public-sector pay is outperforming, outpacing private-sector pay,” said Ted Dabrowski, IPI vice president of policy.

Nowlan said making cuts to the state’s employee roster is easy for legislators because of the perception that fewer workers can handle the responsibilities associated with education, health care and transportation.

Additionally, not all legislators have a multitude of public workers in their districts, but they do have people who use services funded with tax dollars on a regular basis, such as public schools or Medicaid.

One out of four Illinoisans received important state services, and the legislators are understandably reluctant to cut what may be critical services to the people,” Nowlan said. “It’s easy to look at the 70,000 state employees as a place in which to cut.”

Continuing to provide core services is difficult to maintain following years of attrition. But one area that could see cuts is state workers’ paychecks. Quinn is set to start negotiating a new contract with the public-sector unions that would go into effect in July.

Dabrowski and others say they’d like to see the state bargain for smaller paychecks for state employees to help manage the state’s continuing financial malaise. But, Nowlan said it’s hard to roll back pay and other benefits that workers enjoy.

The median salary for a state worker for 2010 was $56,889.91, a jump from 2009’s average of $55,285.12.

Overall, the number of state employees dropped by about 1 percent between 2009 and 2010.

The Illinois Department of Human Services was the largest state agency in 2010 with 13,338 employees, a 1 percent increase over the department’s 13,214 employees in 2009. The department’s main responsibility is running the state’s food stamp program and other related programs.

The Illinois Department of Corrections, the second-largest state agency, saw a 3 percent increase in employees, from 9,718 in 2009 to 10,047 in 2010. The department’s main responsibility is staffing the state’s prisons.

From the Sept. 28-Oct. 4, 2011, issue

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