Senate budget writer sends OFM letter on pay raises

Nov 29, 2016

Sen. John Braun, the lead budget writer for the Senate GOP and current Vice-Chair of the Ways & Means Committee, sent a letter to the Director of the Office of Financial Management (OFM) yesterday concerning the secretly negotiated 2017-19 pay raises for state employees and whether they are "feasible financially." Under the 2002 law that first set up the secret contract negotiations with state employees, the OFM Director is required to determine if pay raises are "feasible financially" before the Governor can include them in his budget. The Legislature is totally cut out of this process other than having an up or down vote - no legislative changes can be made. 

In his letter Sen. Braun says:

"The cost of the CBAs, with compensation terms extended to non-represented and exempt employees, total over $700 million General Fund-State (GF-S) in the upcoming biennia and more than $1.7 billion GF-S over the next four-years. The legislature must also adopt balanced budgets over this same four-year period. This cost of the negotiated CBAs is more than double any other previously negotiated CBA proposals submitted to the Legislature.

While 'feasible financially' is not statutorily defined, the intent of the Legislature in including the requirement is clear, especially when read in conjunction with the requirements for the Governor's budget submittal . . . In sum, in order to comply with the law, the OFM director must conclude that the cost of proposed CBA can be accomplished within existing law and revenue to be financially feasible. Your record shows that you agree with the above interpretation of the law, since the Governor's 2015-17 budget included proposed CBA costs in the Governor's existing law and revenue budget submittal . . . 

I respectfully request, as you undergo your assessment of whether the 20 I 7-19 CBAs are financially feasible, that you please carry out your statutory duty as the law was intended. Only certify the CBAs if they can be funded within existing law and revenues without jeopardizing essential services to our most vulnerable. Submit a real budget that reflects the kind of thoughtful choices responsible public officials are called upon to make. Our taxpayers and most vulnerable deserve nothing less." 

The last time an OFM Director decided secretly negotiated pay raises for state employees were not "financially feasible" was in 2008.

With the 2017 Legislative Session just a month away, the Governor's budget rollout in December will help set the tone for how the debate unfolds. One thing to keep an eye on is whether tax increases are proposed if the budget also includes these pay raises. 

Based on the November revenue forecast, lawmakers will have $41.3 billion to spend during the 2017-19 biennium (not counting federal funds). This is an increase of $2.6 billion in revenue from 2015-17. Realizing that basic education is the state's "paramount duty" and the state still supposedly operates under the Priorities of Government (POG) budget model (most important priorities purchased first leaving any tax increases for those items at bottom of the buy list) there will not be any tax increases for education. 

Of course, if the proposed 2017-19 pay raises are determined to be "feasible financially" that should mean the Governor's budget won't have any tax increases at all, right? 

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