2.5 percent salary cut for state employees could become permanent

By Andrew Doughman

Saturday, May 4, 2013 | 1:13 p.m.

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.”