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January 2012 Policy Study, Number 12-1

   

Iowa's Privileged Class: Time for a Change!

    State Government Payroll Changes
   

 

The NGA/NASBO report also provides a summary table of the number of filled full-time equivalent (FTE) positions in state government over the last few years. The total Iowa FTE increased by 1.6 percent from FY2010 to FY2011, then fell slightly in FY2012. Iowa now has a total of 41,790 FTEs, up from 41,572 in FY2010. In contrast, states such as Michigan and South Carolina reduced their state government FTEs from 12 to 16 percent during the same time period.[33]

 

As widely reported in November 2010, outgoing Governor Chet Culver (Democrat) acted to limit incoming Governor Terry Branstad’s (Republican) personnel funding options by signing a two-year contract with the American Federation of State, County, and Municipal Employees (AFSCME) union immediately following his re-election defeat.

 

That contract required a 2 percent salary increase last July, and another 1 percent this January (2012).

 

In addition, according to the contract signed by Governor Culver, the FY2012 salary increases are followed by another 2 percent across-the-board increase in July 2012 – at the beginning of FY2013 – and another 1 percent increase in January 2013.[34]

 

The total amount of the increases is expected to be over $200 million in permanent additions to the state budget, plus the corresponding increases in pension and health-care contributions.

 

These raises were higher than those enacted in all other states for fiscal 2012, except Hawaii, which allowed a 5 percent across-the-board pay increase.[35] Nationally, according to the Bureau of Labor Statistics, the average increase for state government workers was 1 percent.

 

So in November 2010 Governor Culver gave a Christmas present to state government workers that was three times bigger than that received by workers in other states. The speculation was that this lame duck action was a “thank you” gift to union workers for their support of Governor Culver in the election. Unfortunately, Iowa taxpayers will have to keep on funding this gift for a very long time.

 

The raises given to Iowa government workers were not only better than those given to government workers in virtually all other states, they were significantly better than the raises received by most private-sector employees, who generally received only a 1.6 percent raise in 2010 and 1.7 percent 2011.[36]

 

With this gift by the former Governor, the well-documented Iowa government/private-sector employee pay gap continues to widen. The most recent idiscussion of the Pay Gap in Iowa was in the March 2011 Public Interest Institute (PII) Policy Study, “Iowa’s Privileged Class: State Government Employees.”

 

   

 

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