Raise your hand if you got a raise

For some 12,000 state employees, the long wait for a pay raise has finally ended. Legislation passed this last session provided selected workers a raise of 6.25 percent or more, effective July 1 (or in the case of state troopers, January 1). But with legislators appropriating significantly less than what an expert study recommended to move the state towards more competitive compensation, a majority of state employees were left out of this year’s pay raise plan.

Legislators also decided to pick and choose which positions received raises without much input from the agencies involved. This ad hoc process left out some workers who are in very similar positions to those who received raises. While the raises were a welcome start, many Oklahoma’s public employee compensation still has many gaps in what we need to attract and maintain enough qualified workers.

Who’s In, Who’s Out

Under SB 2131, full-time state employees in specified job titles in the areas of law enforcement, corrections, nursing, social services and youth services were granted the 6.25 percent raise effective July 1, while corrections officers at the Department of Correction received an 8 percent raise. Under separate legislation (SB 232), state troopers with the Department of Public Safety will get raises of 22.8 percent on January 1. The Department of Human Services also received funding for child welfare worker raises under the Pinnacle Plan. 

Here are some key facts about the pay raises, based on data supplied by the Office of Enterprise and Management Services (OMES) and other agencies:

• As of early June, there were 34,426 state employees employed in 122 agencies.
• Just over 12,000, or 25 percent, are expected to receive a pay raise under SB 2131, SB 232 and the Pinnacle Plan.
• One or more employees in 25 state agencies received pay raises.
• Almost 95 percent of those who received raises work for eight agencies:  Human Services (5,177), Corrections (2,469), Veterans Affairs (1,083), Public Safety (1,071), Mental Health and Substance Abuse Services (551), Juvenile Affairs (463), Health (398),  and State Bureau of Investigations (171).
• In nine agencies, a majority of employees qualified for the raise: Pardon and Parole Board, Public Safety, Human Services, Fire Marshal, Juvenile Affairs, Corrections, State Bureau of Investigation, ABLE Commission, and Narcotics and Dangerous Drugs Control. 
• In three of the ten largest state agencies – Transportation, Management and Enterprise Services, and Rehabilitation Services – less than 10 percent of the staff got pay increases.
• In total, the Legislature appropriated $36.8 million for pay raises. 

The State Compensation Study: A partial model

The pay raise bills followed a major study of state employee compensation that was completed in late 2013 by Kenning Consulting and the Hay Group. The study noted that “several years of no general funding for across the board raises, coupled with increased turnover, has caused concerns… regarding compensation.”

The study compared salary and benefits for Oklahoma public employees with the private sector and with peer states in 141 benchmark positions. They found that overall, our state employees are paid substantially below market rates (21.7 percent below the median) and somewhat less than in peer states (6.4 percent below the median). However, Oklahoma’s benefit package was found to be more generous than in the private sector and other states, so that when total remuneration is considered, Oklahoma is more competitive. The study does note that “base salary generally carries more weight than benefits in determining the total remuneration position.”

The Kenning/Hay study provided two primary recommendations:

• Revise the state’s salary structure. Salaries and pay bands would no longer be set in statute but would instead be put under the authority of the Human and Capital Management (HCM) division of the Office of Management and Enterprise Services. Under this approach, the legislature would appropriate a total amount intended for pay increases but leave implementation to HCM. A new salary structure would be developed based on equity across positions and performance-based pay.
• Adopt a multi-year compensation strategy involving adjustments to salary and benefits. For the first year, the study proposed a 3 percent increase in overall funding, of which 2 percent would be applied mostly across-the-board and 1 percent would be allocated for targeted performance and equity adjustments.

The legislature followed the study’s recommendations only in part this year. It did pass a new law, HB 3293, that establishes a State Employee Compensation Program and gives OMES authority to develop a statewide pay structure intended to bring all state employees up to 90 percent of market levels. However, rather than appropriating a total amount for pay increases and allowing OMES or agencies to allocate those funds in line with the goals of the pay structure, legislative leaders instead passed SB 2131, selecting which job titles in which agencies would get a pay raise.

[pullquote]In some agencies, the raises for certain staff vaulted their salaries above those of their supervisors.”[/pullquote]This selection, in what was apparently an ad hoc process that did not include input from the agencies involved, has created discrepancies and inequities for some agencies. For example, in the Department of Mental Health and Substance Abuse Services, patient care assistants received raises, but consumer recovery specialists who work alongside them did not. District Attorney investigators, agriculture investigators and forest rangers (Department of Agriculture), and fugitive apprehension agents (Department of Corrections) are among the positions that perform law enforcement functions but did not get raises. In some agencies, the raises for certain staff vaulted their salaries above those of their supervisors.

In the case of the State Health Department, which had already implemented pay raises based on a comprehensive review of agency salary structure, the legislature passed a follow-up bill to exempt it from the provisions of SB 2131. The Department of Human Services received separate funding for the Pinnacle Plan to provide raises ranging from 6.34 percent to 9.07 percent to child welfare specialists and program staff; DHS also used available funds to provide merit-based raises for all their employees not covered by SB 2131 or the Pinnacle Plan.

In addition, the legislature fell about $12 million short in what it allocated for pay raises compared to what the consultants calculated as needed for the first year of their compensation plan. As a result, nearly two in three state employees, some of whom have gone up to eight years without an increase, were left out. This includes administrative assistants, maintenance workers, engineers, budget analysts, payroll processors, attorneys, food service workers, and many others who do the work of state government. This year’s state employee pay raise also left out school teachers and other educators, who have not had a statutory pay raise since 2007, a situation that has contributed to Oklahoma teacher pay falling to 49th in the nation and to severe recruitment and retention problems.

After so many years of inaction, even a partial victory counts as a win. However, it’s only a first step towards paying all state workers a competitive salary.