Ritter: No Performance Pay for State Employees

Gov. Bill Ritter had bad news for state employees today.

The state's chief executive announced today that he will recommend to the General Assembly's Joint Budget Committee in November that state employees not receive performance-pay salary increases in FY 2009.

The move would save taxpayers $36 million and affect more than 26,000 state employees.

“By withholding performance-pay increases, tens of thousands of state employees are being asked to help serve as responsible stewards of taxpayer funds," Ritter said. "This is a pro-active and precautionary step that will give us even greater flexibility should we need to take additional budget-saving measures down the road.”

Performance-pay increases, first initiated in FY 2002, are based on employees’ on-the-job achievements. They supplement more standard salary increases that are based on market surveys.

Prior to FY 2002 state employees received annual pay increases based on the market surveys plus an automatic five percent increase after five years of service and another five percent increase after 10 years of service.

Since their inception performance pay increases have not been granted for budgetary reasons in fiscal years 2003, 2005 and 2006. In the years that performance-based pay increases were granted, they have ranged from one-half of one percent to five percent. Salary-survey-based pay increases have ranged from 2-3.8 percent during the past few years.

Ritter’s Office of State Planning and Budgeting estimates a general fund savings of $21 million, plus another $15 million from outside the general fund, by forgoing performance-based pay increases in FY 2009, which starts July 1, 2009.

The governor's proposed FY 2009 budget proposal is scheduled to be submitted to the Joint Budget Committee on Nov. 1.