Idaho hasn’t lost any more ground, but its state employee compensation remains far below market rates, despite 3 percent merit raises approved last year, state lawmakers learned Thursday.
That matters because state law requires that the state pay competitive wages and benefits to attract and retain a quality workforce.
Gov. Butch Otter is recommending another 3 percent in merit raises next year; his budget director, Jani Revier, urged lawmakers to grant the request.
But members of a joint legislative committee questioned the data from two expert consultants who conducted salary surveys to judge how Idaho’s doing. Some said it was inappropriate to compare Idaho salaries to those in any other state; others questioned whether the experts had really taken into account the comparative cost of living in Idaho.
Sen. Mary Souza, R-Coeur d’Alene, said Idaho legislators, for example, make about $17,000 a year. “The legislators in the state of Washington make somewhere near $60,000,” plus they get staff and district offices that Idaho lawmakers lack, she said. “So there’s a vast difference in the way people are treated in their jobs between one state and another. And I’m not complaining. I’m just saying there are very big differences.”
Souza suggested that state officials and consultants were “comparing apples to oranges.”
But consultants for Milliman and the Hay Group said they compared only directly comparable jobs, and cost-of-living differences were fully accounted for, as part of calculations of the cost of labor. Greg McNutt of Milliman said he wouldn’t compare Idaho and Washington legislators, because their jobs aren’t comparable; the surveys compare only strictly comparable positions.
Idaho lawmakers last year requested an “Idaho-centric,” custom survey, in addition to the Hay Group’s annual survey, which has been conducted for many years. That’s what Milliman prepared. It found that state employee salaries are 9 to 9.9 percent behind market rates; the Hay survey found that they’re 24 percent below the market. When Idaho’s relatively generous employee benefit package is factored in, total compensation still lagged 10 to 12 percent behind market rates.
The Hay survey also found that Idaho’s market position hasn’t changed since its last survey in 2015.
Revier hailed that as good news. “We’re holding our own,” she said. “The governor hopes that you will join him in recommending another 3 percent … so that we do not lose ground” as Idaho’s economy continues to boom.
State Human Resources Administrator Susan Buxton said it’d be folly to ignore the higher salaries in neighboring states when looking at Idaho’s state employee compensation.
“You can actually make more money working at Arby’s in Clarkston than you can being a CNA (certified nurse’s aide) at our (state veterans) home in Lewiston,” she said.
Plus, she said, Idaho competes with the city and county of Spokane for state troopers, and with Oregon’s state prison just over the state line in Ontario for correctional officers, who can get trained in Idaho, then commute across the border and make “significantly more.”
Souza objected, telling Buxton, “The comment you just made, I really am a little bit taken aback by it. Because yes, the cost of living and the style of living in Idaho we think is wonderful, because that’s why people have chosen to live here. And we do have border communities where people can go across the state line and make more money, that’s a problem, but I don’t see any instant answer for that.”
Riley said the Hay survey looked specifically at all 231 of the state’s job classifications, while McNutt said the Milliman survey made a “deep dive” into 73 benchmarked, comparable jobs in Idaho.
“We’re looking on a per job basis what that job pays here, and what that might pay in the private sector and what that might pay in these other states,” Riley said. “That’s when those economic, cost of labor factors are applied, at that level, to account for what it might cost to live in another area. … It’s not doing a macro view of the state of Washington. … That’s not part of the analysis. We’re looking at individual jobs that we compare on an apples-to-apples basis and ensuring that we equalize that data based on the cost of labor in the market.”
Several other lawmakers also questioned the data, including newly appointed Sen. Tony Potts, R-Idaho Falls, who said he’s noted that rents are 30 percent higher in Boise than they are in Idaho Falls. “My concern here is that I think cost of labor is important … because we have an international marketplace, but I think cost of living still provides the facts that we need for the state of Idaho, because there is such a diversity between the different parts of the state that we have,” he said.
Sen. Janie Ward-Engelking, D-Boise, said, “The last several years, we’ve looked at state salaries and benefits in a number of ways; the reality is that we are below market. I think we’re missing the bus if we don’t say: What do we need to do to reward our employees so that we don’t lose them to surrounding states and the private sector? … I hope maybe we can get past some of this, and look at what we can do to move our employees forward.”
Sen. Grant Burgoyne, D-Boise, said, “Labor markets are dependent on the occupation, and labor markets are not driven by political boundaries. … This is complex stuff, and I think these people have tried to account for those variables in the study that they have done, and it think it’s perfectly fine to look into how they’ve done that, but I’m persuaded that you cannot get to an analysis of human behavior with respect to a labor market that controls for absolutely everything. There is a point at which the math stops, the science stops and this becomes an art.”
The committee will hold two more meetings over the next week, and hear from an interim legislative panel that’s recommending re-bidding the state employee health insurance plan and making other changes. Then it’ll vote on its recommendation to the Legislature’s budget committee for state employee pay and benefits.
The joint budget committee will make the final call, then factor those costs into every state agency budget it sets this year; Otter still can sign or veto each of those bills.
This story first appeared in The Spokesman-Review.