The sky is falling

Other agencies have been told the 10% "budget reduction exercise" is now 15%. Of course, we don't hear anything from TCO...Am I the only person curious as to how this agency plans to address the issue?


Bill Cotterell: As the cutting begins, state workers cringe

If you make a few simple mathematical assumptions, you can figure out what's likely to happen to state employee benefits in the coming legislative session.

Pay raises? Not even the most optimistic employee or Big Bend legislator expects to see any.

Layoffs? Everyone says they're trying to avoid them. But look around at what's happening in the private sector — that is, among the folks who pay the taxes that finance state government — and it's hard to imagine how legislators can keep cutting positions rather than people.

Furloughs? Those are even harder to accomplish than layoffs. Two governors ago, state agencies tried to define "nonessential state employees," who were instructed to stay home when a new fiscal year dawned without a budget agreement. State troopers and prison security staff were obviously "essential," and nobody wanted to offend the lieutenant governor by rigorously defining what constitutes "nonessential" work, but the crisis was averted by a midnight compromise between the governor and legislators.

Benefits? That's where the math gets really simple and obvious. If they can just hold the line on insurance and pensions, it will be a very good legislative session for state workers.

Do the math: You're an employer and you're providing some service at no cost for your about one-fifth of your employees, and very cheaply for the rest. Your total work force has been declining for several years, but the bottom line has now leveled off, while your cost of whatever you're subsidizing has risen sharply. And, finally, let's say your sales are down so your income is falling.

It doesn't take an MBA to figure out that you're going to have to do one of three things to those fringes you're giving employees. You can reduce the size of the benefit, start charging those who aren't paying, or raise rates for those who are paying. In fact, unless sales pick up unexpectedly and your income heads back up, you'll probably have to do two or all three of those things.

Everyone says the legislative session that starts two weeks from tomorrow (!) is going to have to cut another $4 billion to $5 billion out of state spending. Gov. Charlie Crist will outline his plans for the 2009-10 budget this week, but the House and Senate have been doing their own preliminary work for months.

For example, a Senate appropriations panel had an interesting discussion of insurance for state employees and retirees. Sen. Steve Oelrich, R-Gainesville, made the point that, as a rule, state salaries are lower than employees might earn in the private sector, but benefits are generally better.

He didn't mention that job security has traditionally been part of that trade-off, but nobody really expects that anymore. Oelrich, a retired Alachua County sheriff, knows about managing a large staff, but a lot of state employees might not agree that the state's benefits are so generous.

DMS statistics support Oelrich's view. The Annual Workforce Report says that, as of last June 30, the average Career Service salary was $34,508 and the cost of benefits ran $23,438 — roughly a 60/40 split for the total cost of employment. In Selected Exempt, the average cost of benefits ($25,468) was more than half the average salary ($48,764), and about $6,000 higher than the benefits cost in Career Service, due to that "free" insurance.

In tough times, it would be politically popular with their constituents (not to mention premium-paying state employees) if legislators ended, or greatly curtailed, the perquisite of "free" insurance for the bosses — including themselves — and mid-level state managers. The reason "free" is in quotation marks is that nothing is really free; the employer pays for it, rather than the employee.

And this year, worse than ever, the employers (read: taxpayers) are worried about their own jobs and benefits.

However irresistible it is politically, having Senior Management, Selected Exempt and legislative employees start paying premiums would be unfair. Avoiding premiums of $50 a month for individuals or $180 a month for family coverage is a relatively small reward for being an "at-will" employee, subject to dismissal at any time, for any reason.

To which the laid-off employees of Circuit City, aerospace workers nervously waiting to see what follows the Space Shuttle program and people at a dozen newspapers around Florida would reply, "Hey, we're all at-will employees now." Part of the problem is that about 16,400 formerly Career Service employees were moved to the Selected Exempt Service by ex-Gov. Jeb Bush's "Service First" initiatives just a few years ago. Leaving them in SES, while taking back their paid-up insurance, would be unfair — and wouldn't make all that much of a dent in that budget shortfall.

The state could reduce insurance benefits or raise co-payments, and the Department of Management Services is always trying to negotiate better deals with providers. It could start making married couples, when both parties work for the state, pay for insurance. (If you're not familiar with that one, it's complex; this exemption adds up arithmatically but makes no sense as a personnel policy.)

There's a bill in the Senate to make all new employees take the optional retirement plan, which wouldn't be "optional" anymore, rather than the traditional defined-benefit system. There's even one to rescind the requirement of wasting a certain percentage of building costs for art in public places, to make the workplace a bit nicer.

They could even take a look at those $2 to $6 parking fees, which haven't been hiked since Union soldiers hitched their horses on the Capitol lawn.

Again, pennies, a pittance, pebbles kicked into the chasm between revenue collections and budgetary needs. But when legislators say "everything is on the table," state employees have cause for concern.


Contact Bill Cotterell at (850) 671-6545 or bcotterell@tallahassee.com.

Thanks for the info. We won't get that type of honesty here. The following is a partial transcipt from a recent headquarters meeting:

Big Boss: Full steam ahead!!!
Middle Boss: Be careful. Icebergs in the area.
Little Boss: %%&%$#&()))) We have hit a (^%#$%^%@ iceberg!!!!!
Big Boss: Look! Free ice.

This was posted before but it is still funny. Full steam ahead!!!!!!!

We have two eyes to see two sides of things, but there must be a third eye which will see everything at the same time and yet not see anything.


Since it is all too clear
It takes time to grasp it.
When you understand that it's foolish to look for fire with fire,
The meal is already cooked.

We have two eyes to see two sides of things, but there must be a third eye which will see everything at the same time and yet not see anything.


Since it is all too clear
It takes time to grasp it.
When you understand that it's foolish to look for fire with fire,
The meal is already cooked.

Cocaine is a powerful and dangerous drug. Don't be ashamed to ask for help.

We have two eyes to see two sides of things, but there must be a third eye which will see everything at the same time and yet not see anything.


Since it is all too clear
It takes time to grasp it.
When you understand that it's foolish to look for fire with fire,
The meal is already cooked.

Cocaine is a powerful and dangerous drug. Don't be ashamed to ask for help.

First sign of addiction is denial...