Las Vegas Sun

November 25, 2015

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The cost of government

In many cases, compensation for public employees must be reined in

For several years in Nevada there has been an outcry about government workers’ compensation, and it has grown louder because of the state’s current economic condition. As budget cuts are eroding Nevada’s already meager services, it has become clear that many of the pay-and-benefit packages are unsustainable.

For example, in recent years Clark County has seen its payroll balloon, inflated by bonuses for longtime workers and out-of-control overtime. The average county employee’s pay-and-benefits package is more than $90,000, and the average firefighter earned more than $100,000 last year. More than 400 county employees, most of them firefighters, earned more than $20,000 last year in overtime pay.

Government employees also earn lucrative retirement benefits, as well as other perks, including generous time off and sick leave.

In years past, government officials argued that they needed to offer strong benefits to attract good candidates because the pay wasn’t competitive with the private sector. But those days are long gone.

Several studies have shown public employees in Nevada on average make more than their counterparts in other states. Government pay outpaces wages for comparable private-sector jobs in Nevada. However, before anyone gets the sense that government is bloated, it should be noted that Nevada has the lowest number of government employees per capita in the nation.

State government has cut pay and reduced its workforce over the past few years to try to tighten its budget, but local governments have found that difficult to do. Unlike state employees, local government workers can form unions and engage in collective bargaining with employers. And local government officials have not done a good job reining in payroll expenses. Past negotiations have resulted in contracts that offer lucrative benefits to employees, and the governments are locked into those contracts. For anything to change in the near term, it will either mean layoffs or union concessions.

Las Vegas recently announced it would have to lay off nearly 200 people unless its employee unions agreed to an across-the-board reduction in pay and benefits. City officials are now negotiating with the unions.

Many people who criticize employee pay use the issue to decry government and unions, and that is a shame because it pollutes the debate. Government plays a vital role in our society, and Americans should want top-notch people working in government. To attract good candidates, governments need to be competitive with their pay and benefits. The problem is many of these contracts don’t recognize the economic reality of the times.

How many private employers have anything close to these pay-and-benefits packages? Many union contracts require an annual wage increase, which has become a rarity in the past few years outside of government. And although many private employers have cut their match for retirement pay because of the recession, state law requires governments to pay at least half of their employees’ contribution to the state pension fund.

The bottom line is that if the state and local governments are to get a handle on their budget problems, they will have to address the level of pay-and-benefits packages for public employees and reduce costs. Otherwise the level of needed services will decline more as government budgets will unacceptably be eroded by payroll.

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