February 11, 2015

Hogan agrees that state employees deserve a pay hike, but says state can’t afford it

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Busch Moran

Photo above: House Speaker Michael Busch speaks, far right, at news conference with state workers and AFSCME President Patrick Moran at the podium. (Photo by Rebecca Lessner for MarylandReporter.com)

By Len Lazarick

Len@MarylandReporter.com

Hogan Rutherford 2

Gov. Larry Hogan with Lt. Gov. Boyd Rutherford

State employees and legislators protesting the lack of cost-of-living raises in next year’s budget found an unusual supporter Tuesday — Gov. Larry Hogan, who provided no pay raises in his fiscal 2016 budget.

“This was the most difficult decision we had in the entire budget process,” Hogan told reporters in a wide-ranging news conference.

“I think they (state workers) deserve a pay raise,” Hogan said. “I think they’ve gone far too long without a pay raise.”

“We had big arguments with our budget team” on the issue, Hogan said, adding that the only alternatives were thousands of layoffs or furloughs.

Hogan also said he agreed with respondents to a new Washington Post poll that showed Marylanders want more money for education.

“I’m opposed to cutting education as well,” Hogan said, saying he had increased school aid in his budget. “If I was taking the poll I would oppose that as well.”

“If the people in the legislature can find more money for education, we’re willing to do that,” Hogan said.

He said the same thing about pay hikes for the state workers, whom he praised as hard-working and dedicated.

Union members, legislators protest

Hours before Hogan’s press conference on his proposed repeal of the rain tax — one of his most popular stands, according to the Post poll — AFSCME, the largest union representing state workers, and legislative leaders spoke out against Hogan’s failure to fund pay hikes.

“You cannot constantly balance your budget on the backs of state employees,” said House Speaker Michael Busch.

“Over the last 10 years, they have been the meat and bones from which we have carved our budget cuts,” said Sen. Richard Madaleno, vice chair of the Senate Budget Committee.

In order to balance next year’s budget, Hogan eliminated both cost-of-living increases and step increases for state workers, saving $162 million.

He also is calling for 2% in unspecified cuts to state agency budgets.

Patrick Moran, president of AFSCME Council 3, said, “Across-the-board cuts are like trying to cut your fingernails with an ax.”

The heads of the budget committees in the House and Senate have asked for more details about where these cuts might come from.

According to legislative analysts, Hogan’s budget does slightly increase school funding by 0.4%, a $6.1 billion item in the budget, leading to his accurate claim of record funding for education. But that is $144 million less than the counties and Baltimore City were expecting for schools.

Half the counties will receive 1% to 2% less state aid than they did last year, and Baltimore City gets $41 million less, a 3.3% reduction. This is partially due to increasing property values in the city, which affect the wealth calculation and its ability to collect taxes that is part of the funding formula.

The legislature must approve changes in mandated school funding formulas to balance the budget Hogan has proposed.

  • Eleanor

    Many State employees would get an automatic pay raise if they were not forced to pay fees to the union

    • Ken Sandin

      Without union representation, they would be in the food stamp lines with Walmart employees. A major cause of the growing inequality over the last 30 years has been the decrease of union power, Yes, I’m referring to the legacy of Ronald Reagan. I have never been a union member, just paying attention and able to connect the dots.

      • Prudent

        Nonsense, the only reason the state employees are forced to join the union or pay a union fee is because the unions are in the pockets of the legislatures.

        • Les

          I have to agree with Prudent. The only reason state employees have to pay this fee is from Gov Glendening signed executive order that what ever unions negotiate with state all state employees have the same deal. So union members started to drop off because it did not pay to be member. Governor O’Malley was re-elected he put in law that if you get the benefit of raise you must either be part of union or pay collective bargaining fee to union. What did union do about furloughs and salary reductions nothing. So why bother to join them.

      • amdactivist

        BS Ken. Unions are the root of the problem.

        • Prudent

          I don’t believe the unions are the root of the problem, but they are powerless to make change in what the state mandates concerning pay and benefits. With private enterprise the unions have more power to negotiate for worker’s rights and benefits. With the state, the employee is at the mercy of the state coffers. If as with Maryland, if the state is experiencing budgetary shortfalls the state employee pays the toll. While the state employee may have decent benefits, the cost of the benefits has increased dramatically over the past several years. The health premiums have gone up and coinsurance deductibles have been added for some policies. The result of such increases is a reduction in salary. Add that benefit cost increase to the 5 years of no raises and furloughs and state employee has seen their income shrink.
          Other states are now considering abolishing laws that require state employees to pay the collective bargaining to the unions and Maryland should follow that example.

          • Nicholas Zahn

            The union has no real power in state government. They can’t force legislators or governors to spend more money.

    • Dave

      Maybe they could at least cut the fee in half when we do not receive a COLA increase or a step increase.

  • MD observer

    AFGE’s current agreement with the state provides “within-grade increases” which are automatic pay raises for the overwhelming majority of the state workforce. Len’s article covers a second kind of pay raise, “across the board” increase.

    Regardless, the localized employment market for bureaucrats pits salaries and benefits for state workers against their Federal counterparts, but the Feds pay is better which should be a concern for the state’s human capital managers.

    • Nicholas Zahn

      1. Step-increases (“within grade increases”) require good performance reviews and are meant to keep state employees on track with private sector work of the same kind that provides regular promotions, bonuses, profit sharing, 401K benefits, etc…

      2. 2% COLA (Cost-of-Living-Adjustment or “Across the Board”) are meant to keep wages on track with inflation. I don’t see the State in recession anymore so goods/services are getting more expensive everyday while my wage is the same as when I got my job 4 years ago.

  • Goldsborough

    It’s easy to pay lip service to placate our state employees once the decision has been made to cancel their raises. If Hogan really wants to show solidarity, he should cancel his and the lieutenant governor’s own 10% raise. In fact, he should cancel the raise that our delegates and senators are scheduled to get. I’ll go a step further: Hogan can serve as governor without a salary.

    • Dale McNamee

      Why not have the Senators & Delegates serve without salaries as well since they only work 90 days a year ?

    • amdactivist

      How do you know he’s getting a raise ? Ask him.

      • marylandman

        Please inform yourself, moron. Both Hogan and Rutherford received 10% raises this year. If you’re going to vote, please stay informed. Your ignorance is bad for our electoral system.

  • Dale McNamee

    I find it sadly amusing that State employees are upset over not getting a raise, while non-State employees (i.e, private sector) who haven’t gotten raises,took pay cuts,lost work hours,etc. are paying taxes to fund those raises…

    Why don’t every Delegate & Senator donate part of their pay to give them a raise ?
    Same would go for all department heads…

    The average taxpayer can’t afford giving raises to people who earn more than they do !

    • Les

      Dale over the last 10 years State employees have lost pay due to furloughs and wages decrease over service reduction days. Just like private sector health cost has increased as well. I am just hoping that General Assembly will work with Governor Hogan to attract more business to Maryland in hopes that increase revenue will stabilize general fund revenue. However my worst fear is that General Assembly will not work with Governor Hogan and do the same thing to him as they did to former Governor Erhlich and just over ride his veto on everything.

      • Dale McNamee

        I agree, Les !

        The so-called ” media” in this state should report on all of the shenanigans of the General Assembly and report on the votes taken… I could care less about the latest shooting,sports,etc. The local news resembles “Inside Edition” and “Access Hollywood” in news content.

        Like you, I hope that more companies move here so that more people can be employed and more tax revenue can be received.

        It’s up to the citizens of Maryland and media sites like Maryland Reporter to keep up with the Legislature and hold them responsible and vote them out. But, that requires vigilance… I’m happy to say that I know very little about the “trivia” that passes for news…

        Also, the Delegates & Senators should only be paid for the 90 days that they are actually in session… That should save the state money…

        And how about cutting spending by one penny per dollar ? Connie Mack from Florida proposed it for the Federal Budget and it was to balance the budget in 5 years.

        Also, NO AUTOMATIC TAX INCREASES ! Every tax increase should be voted on ! Same with increased spending !

        • Scott

          I agree also. I voted for Hogan because he said he would work ‘together’. He has not exactly set a great ‘together’ tone so far… All have to realize they will not get what they want and compromise! Holding state employees wages hostage to bipartisan politics is pathetic.
          Ironically Erlich gave state employees 5 straight years of increases and returned the 401k match. He did not believe in furloughs.
          What Hogan is proposing is worse than a furlough, a permanent pay cut.

          • amdactivist

            yes he has. he’s doing what he has to do. md 4th highest taxed state and 2nd in foreclosures. He can only do what Miller, Busch and hoyer allow him to do.

          • Goldsborough

            And where do YOUR statistics come from?

          • Les

            Scott I am State Employee. I do not remember 401K match returning under Governor Erhlich. This fiscal mess starts with General Assembly passing unfunded mandates to look good every 4 years as election is coming up.

          • Stateemploye2

            There was a matching plan but that was discontinued when O’malley became the governor. Are you aware that hogan offered an early retirement for employees who had two consecutive years of state service but who ever leaves, that agency has to give up that pin (position). Therefore, very few will be approved by the head of each agency. As raises are concern, I’m willing to take the 2% cut if and only if legislation. governor and lt governor give back a raise, and amend the state constitution that only exempt emergancy personel (fire fighters, police, emt, etc). That means judges, legislators and the governor will have to take furloughs. Health benefits are not that great, most of the plans will cover only 90% of the bill, cover less. you have surgery that may cost $20,000, you will end up paying 2000 out of pocket as well as doctors and staff that participated with the surgery. That is pretty lame if ask me

    • marylandman

      State employees are mad because Hogan is rescinding their 2% cost of living increase they received at the beginning of the year. Try to stay informed, moron, or don’t vote.

      • Dale McNamee

        So, what are the options ? Furloughs & layoffs ? Were the people in the photo holding the signs “on company time” or not ? If so, their pay should be docked…

        Meanwhile, the “non-governmental” employees aka the private sector employee,have been laid-off,HAVEN’T GOTTEN ANY TYPE OF RAISE,LET ALONE A “COST OF LIVING” ONE, facing a reduction of hours, facing increased costs…

        So, I don’t “idolize” the state employees & I don’t feel any sympathy for them as they have good paying jobs & benefits payed for by the rapidly impoverishing “middle class” taxpayers like me…

        And you,Marylandman, take your own advice: ” Try to stay informed, moron, or don’t vote. “

        • StateWorker

          I work for the state and I can vouch that we are paid far less than private sector workers to begin with. I have been a state employee for three years, yet I’m too “rich” for low-income housing and too “poor” to afford an actual apartment. I would rather take a couple of furlough days than a total pay cut.

          What makes up for the crappy pay is the job security – I have seen firsthand that even people who REALLY deserve to get fired get to keep collecting a check. Every time I see the government waste money on something (or someone) stupid, I think, “There goes what could have been my cost of living increase.”

          • Dale McNamee

            Thanks for your response !

            It’s good to see you step up regarding wasteful spending and “unworthy” state employees who should be fired and aren’t…

            Whatever rules governing public employees need to b looked at to make firing such employees easier… ( This should be applicable to Federal and Municipal employees… (( and those in the upper echelons of all levels ))…

            I bet that you would get fired very fast if you became a “whistle-blower” on the bad employees…

  • Scott

    Dale, I used to think the same way you do. However the State has a strange pay plan. They start employees well below market assuming that they will get increments to bring them up to market level within a few years. I had never worked for the state because of the extremely low starting salaries. However 6 years ago when jobs were non existent, I ended up working for the state. I immediately got 2 years of furloughs and 5 years of no raises. I’m still below market and can’t take it anymore. Jobs are out there now and I am leaving unless there is a virtual guarantee of raises. So the question is, can the state afford not to give state employees raises? Citizens expect services and are going to be poorly disappointed. Don’t take my word for it look up jobs on the state website and note that the lower number is the starting number. ( if this goes thru subtract 2% from that number). And sure the benefits are good but try paying your mortgage with them.

    • amdactivist

      why is 47% of md working for the state anyway? It really bothers me because whenever i see state workers they doing nothing. When i see highway crews it takes 12 guys to stand around and watch while 2-3 do the work. Terrible waste of $$

      • Les

        Amdactivist where are you getting information 47% of Marylanders works for the state? Unless you are using Romney comment that 47% in this country work for the government.

  • amdactivist

    they should be glad they have a job with benefits, paid holidays, furloughs and pensions. Stop your griping. Md 4th highest taxed state in the country. #2 in foreclosures. More homeless people then ever. And new americans working our jobs. So shut it and thank omalley and his democrat stooges for this mess.

    • amdactivist

      Foreclosure Activity Increased in August Property foreclosure events in Maryland grew to a five-month high in August due primarily to substantial increases in new foreclosure filings. Property foreclosure events also rose above last year. Consistent with lenders’ efforts to deplete their backlog of distressed properties, new foreclosure filings in Maryland reached their highest volume in five months and were up over the last year’s volume. Notices of foreclosure sales edged up for the second consecutive month in August and were up over last year while lender purchases of foreclosed properties declined to their lowest volume in three years. The State’s August ranking in foreclosure rate improved to the 3rd highest nationwide, behind Florida and Nevada. At the national level foreclosure activity increased significantly in August due largely to an uptick in new foreclosure filings. On an annual basis, total foreclosure events declined below year ago levels. August foreclosure events declined in 25 states and the District of Columbia but increased in the remaining 25 states. Maryland posted the 5th lowest monthly growth in foreclosure events among states that experienced foreclosure increases in August. Compared to last year, foreclosure events decreased in 40 states, but increased in the remaining 10 states including the District of Columbia. Maryland recorded the 2nd lowest year-over-year growth in foreclosure activity among states that registered foreclosure increases.

      • amdactivist

        well Md improved from 2nd highest foreclosed state to 3rd. More homeless then ever. Omalley’s tax the rich ideas included most of our employers who are no longer in business. Md lost between 8k-10k business’s gone under Omalley/brown. People really need to do their homework before they get to the polls.

  • Holly Fratz

    So forget the fact that state workers have families to provide for. And forget the fact that state employees put their lives on the line everyday for the safety of our communities. Unreal! Boy, quitting my job and living off taxpayers is sounding more and more appealing every day! Thanks Hogan!