Last year, the General Assembly provided a badly-needed 8% raise for state workers in fiscal year 2023, reversing a 14-year trend of low or no cost-of-living increases. At the same time, lawmakers set aside $200 million for the equivalent of a 12% raise in 2024, pending recommendations for how to distribute it from the Personnel Cabinet.
Now, with less than two weeks left in the legislative session, the General Assembly needs to act on those funds in order for the promised raises to happen. House Bill 444, which is making its way through the legislative process, seeks to address this through allocating $89 million for a 6% raise. While any raise is better than no raise, HB 444 would still leave state workers making far less in real dollars than they were in 2011 and spends $110 million less than the $200 million already set aside for that purpose.
If Kentucky is to meaningfully address the state worker shortage that affects vital services we all rely on, the legislature must correct the decade and a half of stagnant worker pay with larger raises and a commitment to gaining lost ground.
The current year raises only kept pace with inflation, with a few exceptions
The 8% raises provided this year were enough to keep pace with the 8% rise in the cost of living that occurred over the year, but didn’t come close to making up for a decade and a half of neglected state salaries. The average executive branch employee’s pay went from an inflation-adjusted $50,145 in 2021 to $50,343 in 2022.1 That small increase was the first time in years that state workers’ real pay didn’t decline. Even after the 8% raise, wages were 7.1% or $3,838 less in 2022 on average than they were in 2011. That doesn’t even account for the significantly less generous benefits package current workers receive compared to what was provided in 2011 – chiefly, the elimination of a traditional defined benefit pension plan for new hires starting in 2014.
Comparisons of average annual pay masks the reality for workers in most cabinets, however. When looking at state employee pay by cabinet, the only two whose workers saw a real increase in compensation from 2021 to 2022 were the same two cabinets that received pay increases above the 8% — Health and Family Services and Justice and Public Safety. These cabinets received extra funding to deal with significant recruitment and retention difficulties among social workers, case workers and public defenders, and to provide bigger raises for state police. Recent testimony has indicated that those higher wages have helped with the staffing issues, but have not come close to fully solving the problem. Since 2011, average inflation-adjusted pay has dropped 5% in the Cabinet for Health and Family Services, and has dropped between 10% and 23% in seven executive branch cabinets.
Job vacancies remain high in state government
Even with last year’s raise, state government is still struggling to fill the positions it needs. Faster-rising private sector wages that were higher than state government pay to begin with have made attracting and retaining a talented workforce very difficult. In the executive branch, 30% of authorized, full-time positions are currently vacant, and 33% of all positions are vacant. This level is actually worse than last year, when only 22% of positions were vacant. That trend is in part because last year’s state budget authorized new positions, primarily among social workers. Understaffing increases the workload on each worker, and can ultimately increase the level of burnout and turnover, which further exacerbates the shortage of state workers. It is a vicious cycle that higher compensation can help address.
House Bill 444 leaves $110 million on the table
To take steps toward addressing this, HB 444 proposes a 6% raise for employees in all three branches, and a $2,000 increase for elected and unelected Judicial Branch employees (before the 6% increase is calculated). This increase is only enough to keep state employees from falling further behind. Through January, inflation has increased 6.3% in the last year on top of the 7.6% increase the year before, for a two-year increase of 14.4%. A 6% raise would only allow state workers to continue treading water, and would make up no ground on the 7% drop in average pay since 2011.
The bill also only spends $89.3 million of the $200 million already set aside for state worker raises this year, leaving $110.7 million on the table instead of in state employees’ paychecks. The sponsor of the bill shared that he expects the executive branch will have finished a study on how to restructure the pay scale, along the lines of a Personnel Cabinet report from last summer, by the end of this year. At that time, the legislature would consider how to further improve public sector wages during the 2024 budget session and ostensibly allocate the remaining funds toward those recommendations.
But there is no reason the General Assembly needs to wait to provide more robust raises to make up for the 14-year gap in meaningful pay increments with all of the money it has already set aside. Then, when the General Assembly returns next year to craft a new budget, it can fix the issues identified by the Personnel Cabinet based on a more comprehensive report on the executive branch pay scale, and get back on schedule with the adequate annual raises that haven’t existed for a long time. Our state government workforce provides critical services, and taking care of them is paramount to them taking care of all of us.