House budget includes one-time bonus for state workers

02/21/2018

A 2 percent bonus would be the plum on top of the Christmas feast for state employees under a budget proposal pending in the House of Delegates that seeks to stanch rising worker turnover rates, especially in demanding jobs.

The proposed one-time bonus would be paid on Dec. 1 to any state employee in good standing who didn’t get any of the targeted raises proposed in the House budget for workers in tough, high-turnover jobs — nurses and direct-care aides in state mental hospitals, correctional officers in adult and juvenile prisons, sheriff’s deputies responsible for law enforcement in their localities, and marine police.

“You get a lump sum just before Christmas,” said Ron Jordan, executive director of the Virginia Governmental Employees Association.

 The House budget plan, flush with anticipated savings from expanding Virginia’s Medicaid program, also would accelerate the 2 percent raise proposed last year by then-Gov. Terry McAuliffe for state employees, college faculty, teachers and state-supported local workers by five months to the beginning of the budget’s second fiscal year on July 1, 2019.

And the House Appropriations Committee proposed to get state employees an additional 1 percent raise in the budget’s second year, but on a merit basis, an approach the Joint Legislative Audit and Review Commission recommended that the legislature consider in a compensation study late last year.

In contrast, the budget proposal pending in the Senate wouldn’t expand Medicaid to accept $3 billion in federal funding under the Affordable Care Act, so the options are few in what Majority Leader Tommy Norment, R-James City, called “truly painful” decisions on employee compensation, higher education and other critical areas the plan can’t afford to fully fund.

The plan the Senate Finance Committee approved would give a 2 percent raise to state employees, teachers and state-supported local employees, such as sheriff’s departments and commonwealth’s attorneys offices on July 1, 2019. But that raise would happen only if state revenues hold up in this fiscal year.

And that would be it, despite a recent study by JLARC that found state salaries lagging behind the market, especially in high-turnover jobs.

“The Senate disappointed me,” Jordan said Tuesday.

However, the Senate proposal would preserve a $13.9 million state subsidy of employees’ share of rising health insurance premiums in the next two years, while the House plan would take it away.

Jordan said state employees appreciate state help in paying for rising health care costs, but he added, “We’d rather have the pay raise than the supplement, absolutely.”

The House bonus also depends on state revenues meeting projections in the fiscal year that ends June 30. That would require at least $32.8 million in revenue above the budget forecast at the end of the fiscal year.

Revenue was tracking 2.4 percentage points ahead of forecast through the end of last month — or more than $400 million above projections — but finance officials cautioned recently that income tax refunds could surge in May and take away some of those gains before the fiscal year ends.

“It all depends on good performance at the end of the year,” House Appropriations Chairman Chris Jones, R-Suffolk, said on Tuesday.

Legislators restored a 3 percent raise for state employees in the current budget after a surprise revenue shortfall in 2016 caused the state to cancel a similar increase. But they had hoped to find additional compensation in the first year of the upcoming two-year budget to address concerns the JLARC report raised about the irregularity of salary and wage increases for state workers.

The proposed bonus in the House plan would represent one-time money rather than increasing base salaries. “It doesn’t increase our base moving forward,” Jones said.

But that’s OK with Jordan, whose association represents state employees across Virginia.

“Would we like an across-the-board raise instead of the bonus the first year? Sure,” he said. “But it still spends the same.”

“It would be nice coming right before Christmas.”