PA Freezes Pay for High-Level State Jobs

By Stacy Brown | PA Independent

For a fourth consecutive year, state employees and cabinet positions will not receive a cost-of-living adjustment, a move Gov. Tom Corbett hopes will help offset a projected $500 million state budget deficit.

Cost-of-living adjustments, or COLAs, are the cost of maintaining the standard of living in a specific area. The COLAs are intended to bring salaries in line with the consumer price index, which is based on the Philadelphia region.
Notices went out Jan. 1 to the approximately 13,000 affected employees. 

"The governor instructed his cabinet members to forgo the annual 3 percent cost-of-living increase, and everyone agreed," said Dan Egan, spokesman for the state Office of Administration, which provides business support to agencies in Pennsylvania’s executive branch of government. Instead, the money will be placed in the general fund. But the adjustments will count toward employee pensions.

Corbett is continuing to receive the governor's statutory salary in effect since Jan. 1, 2010, which is $174,914, and is directing his cabinet to do the same. The 55 cabinet members make an average salary of $78,181 for a total of $4.3 million annually. Corbett "has accepted $2,974 less in 2011 and will be accepting $8,311 less than provided for in statute for 2012," Egan said.

Corbett, Lt. Gov. Jim Cawley and all cabinet members have been returning the increase to the general fund through bi-weekly payroll deductions.

The Office of Administration did not say how much money would be saved by the freeze.

The state employs about 13,000 management-level employees whose average salary ranges from $38,900 for members of the state Tax Equalization Board to $70,800 for state police, according to the Office of Administration.

Union employees, who total more than 60,000 and whose salaries range from an average of $31,338 for liquor store clerks to an average of $112,346 for doctors, did not receive a salary increase.

"We negotiated our contract back in June, and our wages are set," said David Fillman, president of American Federation of State, County and Municipal Employees, which represents more than 31,000 Pennsylvania government workers. "Our members usually receive a 2.25 percent increment on Jan. 1, which they will not receive this year. The next increment won't happen until April 2013.”

Like all elected officials, state lawmakers cannot be forced to forego the increase.

 Steve Miskin, spokesman for House Majority Leader Mike Turzai, R, Allegheny, told the Philadelphia Inquirer.

Calls to several lawmakers from both parties were not immediately returned. They are expected back for the upcoming session Jan. 17. 

Not only will the extra money boost lawmakers' pensions, but lawmakers can take a tax write-off for their donations, said Eric Epstein, founder of Rock the Capital, a government reform group. 

"It's not noble to donate other people's money to charity," Epstein said, referring, in this case, to taxpayer money. 

In December, state Budget Secretary Charles Zogby said he wanted to freeze some state spending to ease a shortfall he expects will reach at least $500 million by the end of the fiscal year in six months.

Officials, including the president for the state troopers' union, also said they expected layoffs in the state police and other departments.

"State revenues are lagging, because the economy isn't growing," Zogby said.

Zogby predicted a $750 million budget shortfall for the 2012-13 fiscal year, which begins July 1.