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October 30, 2014

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Legislature 2013:

2.5 percent salary cut for state employees could become permanent

State and university employees may see a temporary 2.5 percent salary reduction solidified into a permanent pay cut.

Gov. Brian Sandoval’s budget director Jeff Mohlenkamp told a legislative committee Saturday that the administration may amend a bill to make those salary reductions permanent.

As written now, Senate Bill 483 extends current 2.5 percent salary reductions until June 30, 2015, at which time they’d go away and employees would get 2.5 percent of their salaries back.

“We would seek to modify that bill to make the pay cut permanent, and then we would make the affirmative decision to restore the pay (later),” Mohlenkamp told legislators. “Whether we'll have that money or not is not known based on all the other expenditure pressures we have.”

State and university employees have taken some form of compensation reduction since 2009, when the Legislature ordered employees to take 12 furlough days. The Legislature approved a 4.8 percent pay and furlough cut in 2011, and this year it is considering extending the 2.5 percent pay cut and a smaller furlough cut for the next two years.

The announcement from the governor’s representative angered legislators, who said the temporary salary cuts are already having a detrimental effect on morale, employee retention and recruitment efforts. Making those cuts permanent only adds insult to injury, they said.

“That's disgusting to me,” said Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas. “That's not even civil. Then wonder why they don't stay? Wonder why they're retiring?”

Democrats weren’t the only critics.

“Our state employees are underpaid when compared to similar counterparts in the counties and cities, et cetera,” said Assemblyman Randy Kirner, R-Reno. “To further reduce their pay by 2.5 percent, we lose them to these other jobs.”

Several state employees testified at the legislative hearing, and many said they are having a difficult time paying for medical expenses and rent because of pay cuts and higher insurance costs.

Tamia Johnson, who works in the unemployment office, earns about $7,500 less than she did in 2010.

“I have to pick and choose when my children go to the doctor,” she said. “I have to pick and choose when I go to the doctor. I have lost my condo.”

While she’s getting paid less, her costs for groceries, gasoline, health care and other services have increased, as they have for all Americans.

This year, American workers such as Johnson also are paying more because President Barack Obama’s 2 percent payroll tax cut expired at the beginning of this year.

State employees also have seen freezes on pay increases that have traditionally been awarded for two reasons: how long they’ve worked with the state and performance above and beyond what’s required. State employees also lost holiday premium pay in 2011.

Although some employees told legislators that their health insurance costs have climbed during the past few years, Mohlenkamp said that the governor’s office doesn’t plan to increase employee insurance premium costs this year.

Many legislators echoed Kirkpatrick’s comments in condemning the idea of making the pay cuts permanent. They also said they’d like to reduce or eliminate the cuts.

After hearing criticism from numerous legislators, Mohlenkamp said he’d take their concerns to Sandoval.

“I am a state employee, and I have been for quite awhile, and there's not too many days that I feel overpaid,” he said. “I think the governor would be willing to have a discussion of how best to use available resources to help state employees.”

Desire to help state employees runs into a money problem. Eliminating the 2.5 percent pay reduction costs $70.6 million.

That’s in addition to about $300 million in education programs that Democrats would like to pay for in a forthcoming tax plan.

Senate Minority Leader Michael Roberson, R-Henderson, reminded his colleagues that the money has to come from somewhere, and time is running out in the legislative session, which ends June 3.

“If we need to move revenue around, let's figure out how to do it,” he said. “If we need to come up with more revenue this session, it's day 90 of the legislative session. We better figure out how to do it on a bipartisan basis.”

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  1. Our government is simply too large. Government was never meant to be a massive jobs program. Cut government jobs 15% immediately, then we'll look at more cuts one year after the first set of cuts.

  2. When they are comparing the state employee salaries to the city and county salaries, then the state employees are really upset to see the pay differential.

    So does that mean that the state employees are under paid or are the city and county employees over paid?

    And my definition of pay includes all compensation to include retirement benefits.

  3. Not only is his position reprehensible, but his method of delivery is chicken. Every time he has bad news, he sends a henchman.

  4. The more you take from state employees the less gets spent in the state economy. State employees work AND live here, so all their money for gas, food, mortgage, doctors, etc, goes into private businesses. Cutting their pay even more only hurts business. Their pay should be increased so they can afford to buy more locate products and services. THAT would help get this economy moving!

  5. Instead of cutting everyone's pay, why not look at the people who have the highest salaries and realistically cut their inflated dollar amount.

  6. One interesting headline today is that the number of Irish billionaires has doubled since the economic crash. The number of billionaires and their poor-boy millionaire partners has been increasing all over the world since the crash, along with off-shore Havens where the money goes.

    There is no austerity at the top which depends on stable Governments to keep the economic and social system stabilized. The conservative reward for those that struggle is to have them struggle harder. Lower taxes means more money to buy elections and representatives that reduce their taxes further.

    Privilege buys more privilege and sends bck the message 'keep working', arbeit macht frei. Your reward will come in the next world, not this one, where you will walk the streets of gold forever and leave your ashes behind.

  7. An official salary adjustment sounds better than mandatory furloughs. So what about a REAL ADJUSTMENT for city, county, school district employees? State employees have long been at pay scales more conservative than Clark County, Las Vegas, CCSD.

  8. Commenter Ashley,Ashley has a great idea with, "Instead of cutting everyone's pay, why not look at the people who have the highest salaries and realistically cut their inflated dollar amount."

    By bringing into reality and check these sky high exorbinent salaries of those at the highest salary level, we can find the money to treat workers fairly for their labors. Those who are at the top don't want to play fair, money and power and getting more (not less), is the name of their game. Time for them to tighten their belts too, and live with pay cuts like the rest of us. Somehow, I am just not feeling much sympathy for those who demand insane amounts of money in a public service job. Thank you.

    Blessings and Peace,
    Star

  9. I have been a NV State Employee since 2007. I am a tenured, community college full professor. I possess a terminal degree in my professional field. My salary is $54K. For someone with my credentials, who thinks my salary is too high?

    The national average salary for a tenured full professor is $110K according to the American Association of University Professors.

    I am looking for work elsewhere precisely because Nevada's Citizenry does not support education. Budgets reflect values.

  10. All calculations are based on a $50,000 salary for ease of calculation.

    First, some facts:

    State employees pay HALF the cost of their own pensions. By July, 2013, the employee contribution will increase from 10.5% (in 2007) to 13.25%. That's a 2.75% salary cut ($1,375 out of our $50,000 salary). (NOTE: State employees do NOT receive Social Security, so the pension is it.)

    Nevada has the fewest state workers per capita of any state.

    Furloughs (12 days per year) were a 4.615% pay cut (2009-2011)

    Health care premium for the HMO increased by nearly 500% between 2007 and 2013, for an annual cost increase of $1,200, which is another 2.4% pay cut

    The deductible for PPO tripled in cost from $600 in 2007 to $1800 in 2011, and it will rise to $1,900 next year (A $1,200 pay cut, same as the HMO cost, so the same 2.4% cut)

    In 2011, the 2.5% outright pay cut also cut PERS, resulting in a loss of 0.975% of pension, and was combined with a 6 day/year furlough (2.3075% pay cut) When these three are combined, the pay cut for this was a 5.78% pay cut (2011-2013)

    Now, let's tally all the pay cuts:

    In 2009-2013, our $50,000 salary lost 2.75% to increased pension contributions; lost 2.4% to increased medical premiums or deductibles, lost 4.615% for 2009-2011, then 5.78% for the combined furlough/paycut/pension loss for 2011-2013. That averages a 10.35% pay cut for 4 years from a $50,000/year job.

    This is nothing more than a 10% personal income tax inflicted on 1% of Nevadans (middle class Nevadans). State employees have paid this "personal income tax" for 4 years already, or $20,700 out of a $50,000 salary to balance the state budget. Does that seem equitable? Or just abusive?

    This story gets even more outrageous when you compare state salaries to private sector salaries for COMPARABLE jobs for experienced, degreed professionals. For one classification, median state salaries are from 17 to 28% BELOW median private sector pay, NOT counting the 4- to 5-figure annual bonuses routinely paid in the private sector position for this class. Oh, and the private sector employees get Social Security, which state employees do not.

    Dental and vision benefits were also reduced, thereby increasing costs and (effectively) reducing salaries further" but I think you've seen enough already.

  11. The salaries and benefits of NV Energy will be going up soon. No problem for Sandoval on that action.