Oct. 05, 2015
By Warren Kampf
For all the things you’ve heard about what is wrong in Harrisburg – from efforts to raise income and sales taxes, to the need for systemic public pension reform – there is one issue that has been hidden for too long by the politicians but has a huge impact on every taxpayer and citizen in our state.
This issue is the cost of benefits for public employees, and it is an issue that can no longer be ignored.
As a member of the House Appropriations Committee, I have closely examined the cost for the benefits provided to state employees. What I found out should shock you.
The average cost of employee benefits for state workers is now equal to 75 cents for every $1 in salary. That means for an employee earning $55,000, the average cost to taxpayers is actually $96,250.
What is driving these costs? In addition to the state pensions, state employees enjoy nearly free health care, as well as significant vacation and sick benefits. Most employees receive Social Security, some receive post-retirement health care for themselves and their family, along with other miscellaneous benefits.
In contrast, the average cost of benefits for workers in the private sector is just 30 cents for every $1 in salary.
One of Pennsylvania’s leading news outlets – WITF Public Radio –studied this issue and confirmed these numbers in its June 15 “Fact Finder” column.
When addressing this issue, we must debunk something that may have been true 20 years ago, but is no longer: the myth of the “underpaid” state worker.
As the argument goes, employees who entered into government jobs were paid less in salary but were provided greater benefit packages to help “even out the difference.” It is something we still hear today from union bosses who adamantly oppose any changes to the system. The problem is that it just isn’t true.
According to the Pew Charitable Trusts, as recently as just three years ago, the average salary for a private sector employee in Pennsylvania was $48,140; the average salary for a state employee was $53,070. This same report showed that wages were growing faster for state employees than for private sector employees. (Pew Trusts, 7/2/2013)
Even if someone continues to argue that a state employee should receive more in benefits than a private sector employee, it is impossible to argue that those benefits should be two to three times more.
So, what does this mean for the average taxpayer in Pennsylvania? And what do we do about it?
To start, with the rising cost of health care and pension obligations, it is probable that in less than five years taxpayers will be paying at least $1 in benefits for every $1 in salary. Last year, the state’s personnel cost number was $3.4 billion. Of the $3.4 billion, approximately $1.95 billion was salary and $1.45 billion was benefit costs.
That means the compensation of every single state employee is about to equal two full salaries. That is unsustainable and it is something that no working family or taxpayer can afford.
Further, as the cost of benefits continues to rise, one of two things will happen: either the state will be forced to reduce the funding we commit to priorities like education, infrastructure, environmental protection and helping those who need it through social welfare, or we are going to have to take a significant amount more from citizens in the form of higher taxes.
Clearly, we have come to a point in Pennsylvania where we must change how we do business for the long-term fiscal and economic health of our citizens and our state.
We must change the cost structure of government instead of simply turning to taxpayers for more. This requires real pension reform, a repeal of unfunded mandates, increased accountability, changes to the pubic sector benefit system, and a prioritization of spending. Each of these initiatives must be implemented for the protection of taxpayers and the betterment of our state.
The time has also come for our state’s leaders to stand up to the special interest public sector union bosses who oppose these commonsense and needed reforms at every turn. The only way forward for us as a Commonwealth is to finally confront the massive obligation we have imposed on ourselves and future generations, and the actions that caused it.
If we do not, I fear for the future of every Pennsylvania worker (public or private sector) and every Pennsylvania citizen.
Representative Warren Kampf
157th District
Pennsylvania House of Representatives
Media Contact: David Foster
267.207.0207
dfoster@pahousegop.com
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