Governor proposes raises for state employees, but will that hike your taxes?
Dec 9, 2021, 8:30 PM
(Photo courtesy of the Office of Governor Spencer J. Cox)
SALT LAKE CITY — State employees’ paychecks are low. Utah Gov. Spencer Cox is calling for a 15% raise as part of his budget proposal.
State Auditor John Dougall joins KSL NewsRadio’s Dave & Debbie to talk about what will work and what won’t in paying state workers more.
When an employee leaves for the private sector, money is required to bring his or her replacement on board and up to speed.
“33% of a person salary is what the replacement cost is,” Debbie said.
Dougall pointed out that increasing a state worker’s pay can end up impacting taxpayer’s wallets.
“When you start to increase people’s pay, that has a ripple effect into the cost of government. If you don’t become more efficient [and] effective at what you’re doing, then that causes increases in taxes,” he said.
Competition for workers getting fierce
Dougall said the state offers college graduates with bachelor’s degrees in accounting $20 an hour. But private employers are swooping in and snatching these young accountants up with offers of $23-$28 an hour.
“That is an astronomical increase,” he said.
Dougall added agencies are also competing against other government agencies for workers.
Realign state compensation to employees
Dougall outlined two ways he would rebalance wages vs. benefits for state employees.
Oftentimes state wages are low but benefits are high.
“If you’re a young employee just out of school . . . you’re really looking at the wage. You’re not thinking about the benefits,” he said.
Too much in benefits and too little in wages, Dougall said, needs rebalancing.
Secondly, Dougall said that cost-of-living wage adjustments across the board encourage low performance and discourage high performance.
“I want to see us do more pay-for-performance that encourages high performance because if you’re a low-performing employee, I want you to leave,” he said.
“But can’t you just fire the low-performing employee?” Debbie asked. “But then you have the issue of there’s not enough workers to fill positions, too.”
Dougall said there are hurdles and processes that have to be completed for termination of career employees, but in his office, all workers are classified as at-will employees: an employer can terminate an employee at any time for any legal reason.
“It matches much more like the private sector.”
“Can the state afford the 5% to 15% wage adjustment that the governor is proposing?” Debbie asked.
Dougall said it depends on how targeted the raises are. A more universal raise the state can’t afford, he said.
“But I don’t think that’s what he’s [Gov. Cox] proposing.”
He added the subject of raises highlights the need to create more efficient state government to reduce the burden on the taxpayer.
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