3.3.1.7 Private-Public sector compensation
“State government workers today are paid much more than their private-sector neighbors in 85 out of 88 counties.”
“A median state government worker makes 24.6% more than her private-sector peers ($36,858 v. $29,586).”
“Total annual cost of Ohio government median employee ($66,051) is 34 % higher than private-sector peer ($49,210).” That’s a difference of $16,841.
“This enormous compensation imbalance cannot be maintained, as it is placing too great a burden on the backs of Ohio taxpayers.”
“… it is an undeniable fact that a vibrant government that provides needed services to vulnerable populations and provides other necessary functions cannot be maintained without a vibrant private sector that is creating jobs and prosperity from which tax revenues can be derived.”
“Simply realigning state government worker compensation packages to match those of their private-sector peers would save taxpayers over $2.1 billion in the next two years, which is nearly 28 percent of the (estimated) $8 billion budget deficit (for fiscal years 2012-2103) we need to eliminate.”
“Given that the majority of Ohioans are not government workers, the public labor unions will only exacerbate the growing anger taxpayers across Ohio have with them should they decide to wage a full-scale battle to preserve the privileged status government workers currently enjoy, especially because the only alternative to protecting gold-plated government compensation packages likely would be to significantly raise taxes on already overtaxed private-sector Ohioans.”
“… the compensation packages of government workers have grown increasingly more lucrative and disconnected from the economic reality of the vast majority of Ohioans who do not work for government.”
Cost saving reforms:
Option 1A: Realign government pay to private-sector pay
Option 1B: Freeze pay, including step increases and longevity pay, until private-sector pay catches up with government pay
Option 2: Eliminate longevity pay
Option 3: Require employees to use or lose leave
Option 4: Have government workers pay the same share of health care premiums as workers in the private sector do
Option 5: Reduce the sick leave benefit to the level paid in the private sector
Option 6: Reduce the employer pension match to the level paid in the private sector
Option 7: Make eligibility for pensions the same as eligibility for Social Security payments
Option 8: Eliminate the Cost of Living Adjustment for pensions
Option 9: Tie the pension Cost of Living Adjustment to the Social Security Cost of Living Adjustment
Option 10: Change the pension formula to reflect a 30-year pay average
Option 11: Move from defined-benefit plans to defined-contribution plans with a taxpayer match equal to the private-sector level
“Ohio’s government costs greatly exceed its tax revenue. This deficit is not a Democratic deficit or Republican deficit, it is a deficit caused by both parties who were unwilling to keep the growth and cost of government in check and all too willing to spend money on gold-plated government compensation packages and programs. Any elected official willing to look at the data would have seen the dark clouds gathering around Ohio’s private sector as far back as 1990, but chose instead to join the spending spree occurring at all levels of government.”
Source: The Grand Bargain is Dead. The Compensation of State Government Workers Far Exceeds Their Private-Sector Neighbors. Menu of Cost Savings By Matt Mayer. Research Conducted By Mathew Marlin, Ph.D., Jonathon Scott, and Kaitlyn Wolf Duquesne University July 2010. The Buckeye Institute.
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2009 OHIO median income is $31,341.
2009 Sycamore median income is $48,308.
Sycamore average teacher salary $68,209 (9 month work) equates to $98,209.
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Annual property taxes would be reduced by $21,000,000 if Sycamore spent the same as the median of all Excellent with Distinction schools
Sources:
A reader writes, “The % (wage) increase alone is staggering in an economy where most of us have been frozen or lost earnings.”
By (selected) state, change in personal income in the year since the recession officially ended in June 2009:
N.M. +2.2%
Texas +1.6%
Ky. +1.5%
Indiana +0.5%
Ohio +0.1%
Mich. -0.5%
N.D. -2.3%
Nev. -3.6%
USA +0.3%
Source: The Enquirer 9/21/10 A4 (USA TODAY)
SYCAMORE School District staff is above all 50 state personal income increases during the same period.
“Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis.”
Source: Dennis Cauchon USA TODAY (The Enquirer August 10, 2010)
These excerpts were sent to the Community Press as a Letter to the Editor on August 2, 2010 by a local citizen.
The sad part of this is that Sycamore has only given Substitute Teachers one raise in the past 7 years and that was $2 a day over 4 years ago.
What a slap in the face for those people who go in at the drop of a hat and teach our children. They could make more money with starting pay at a fast food restaurant and get benefits.
The board should be ashamed of themselves.
The schools are just the ‘tip of the iceberg’ in the public-private compensation cover-up. The “tea party” movement is way overdue. Pro-competition principles and constraints are the only solution to runaway costs to tax-payers but this will take a monumental shift in the direction this country in moving. Our leaders need to learn more about human behavior and how to rightly incentivize its citizens through free market ideology. Thanks.
The current Sycamore school district teacher compensation package is in the top seventy five percentile of the “gold-plated public compensation.”
This is outlandish and cost savings must be implemented immediately.