It’s hard to tell from reading the articles, but state employee compensation has risen 17.3 percent over the last ten years.
According to the stories, salary and benefits have decreased as a share of general-fund spending over the course of the last decade. Both articles say:
New Washington state figures show that the cost of paying state employees shrank as a share of government agency costs over the past decade.
Total compensation fell from 20.5 percent of general-fund outlays in 2002 to 18.2 percent in the year ending in June. The decline was in total pay and benefits for both higher-education and general-government workers.
It should be noted that while compensation’s share of the budget has gone down, the dollar amounts being spent have gone up. Compensation for general-government and higher-education went from $2.3 billion in 2002 to $2.7 billion in 2011—an increase of 17.3 percent.
As the story explains, these numbers include general-government and higher-education compensation amounts. Missing from the mix is a significant amount of money that goes to pay for K-12 administrative and teacher compensation.
According to the Office of Financial Management, including K-12 compensation kicks up the total share of salaries and benefits to around 55 to 60 percent of the budget—not a trivial amount of money by any measure.
So what does all this mean?
It seems likely that this information is designed to substantiate soon-to-be-made arguments from state employees and their unions, that compensation costs should be an either constant or increasing share of the budget—if compensation isn’t keeping up with the rest of the budget then there must be a problem. Right?
Not so fast. This argument misses the forest for the trees.
Compensation can go up or down as a share of the budget for different reasons. In this case, it’s not because spending has decreased, but because other areas of the budget have increased faster than salary and benefits for state employees.
What matters is whether government is fulfilling its core functions, whether priorities are funded first, and whether taxpayers are getting value rather than getting taken for a ride. Period.
Appealing to some mythical share of ideal spending on state employee compensation won’t solve the state’s new $2 billion budget hole.
At the end of the day, such budget comparisons aren’t any more useful than looking at the ratio of state employees to toothbrushes, or the variance of state employee compensation compared to changes in the state’s chipmunk fertility rates.
Prioritizing state spending—which includes finding ways to reduce expenditures on compensation—is the best way to deal with the state’s budget problems.