By Byron Schlomach Ph.D.
When I worked for a state legislator in Texas his policy was his legislative offices were open any time his private business was open. I spent many a lonely day in a largely abandoned Texas Capitol on government holidays that were ignored by the world in general. I also enjoyed marvelous health insurance benefits. The birth of my third child cost me personally a total of $20.
Wonderful benefits extra holidays & job security for government employees are often justified as relatively inexpensive perks that compensate for comparatively low government pay.
That justification however no longer applies.
The Cato Institute recently pointed to data from the U.S. Bureau of Labor Statistics that show just how well state and local government employees are paid. On an hourly basis government employees receive salaries that on average are 34 higher than private workers.
Benefits are even better with government paid leave worth 77 more and health insurance valued at 118 higher.
Most government workers enjoy a lifetime claim on taxpayers wallets when they retire too.
State-level statistics are not as easy to break down. However the Tax Foundation has shown that in 2007 Arizonas average state and local government employee made $300 a year more in total compensation than the average private worker.
The latest federal statistics show that in 2008 the margin had grown to more than $1000.
Considering todays budget problems its time to get government employee pay & benefits under control including paid leave health insurance and retirement pensions.
We could start by moving government employees to high-deductible health insurance plans coupled with tax free Health Savings Accounts. This could save the state millions in annual premium increases. We should also convert government pensions to defined contribution plans--like a private sector 401k--instead of defined benefits.
This wont be a huge short-term money saver but it will keep the state solvent in the long-run.
Dr. Byron Schlomach formerly with Texas State Representative Kent Grusendorf & the Texas Public Policy Foundation in Austin is an economist & the director of the Center for Economic Prosperity at the Goldwater Institute.
To Learn More on this subject visit the Goldwater Institute: $50 Billion Tidal Wave: How Unfunded Pensions Could Overwhelm Arizona Taxpayers
Cato Institute: Employee Compensation in State and Local Governments
Tax Foundation: Average Total Compensation in State & Local Government Federal Government Military & Private Sectors 2001 & 2007
