Old wine in new bottles stings LA taxpayers

Swapping old wine into new bottles didn’t make the grape harvest any less bitter, according to a new release from the Louisiana Legislative Auditor.

That office studied state classified personnel expenses from fiscal years 2013 through 2020. These employees comprise just over three-fifths of the state’s full-time equivalent workforce, although the study excluded some such as those employed in higher education institutions. What it discovered confirmed the corrosive effects of pay policy changes starting in 2018.

After he had made half of appointments to the State Civil Service Commission (and could count upon the sympathy of the elected classified employee representative), Democrat Gov. John Bel Edwards took a pay plan in need of reform and, if anything, made it worse (ratified also by narrow legislative majorities). In a new form, it perpetuated the masquerade of performance pay raises for cost-of-living boosts, because almost no employee in the state receives a rating making him ineligible for a raise, much less triggering eventual separation.

The latest (FY 2020) illustrates how nothing has changed in that regard. Not including state police, the typical classified service employee took home $48,583 (classified employees collected $69,597 on average), compared to a 2019 average for all Louisianans of $44,170. Keep in mind this doesn’t include benefits, which when factored into wages typically places state and local government wages an equivalent of 10-15 percent higher than those with comparable tasks in the private sector.

Also, out of about 62,500 workers (full- and part-time, classified and unclassified), only 105 were dismissed for inadequate performance (although some of the 1,665 who resigned for personal reasons likely left after being pressured on the basis of inferior performance). Plus, out of around 36,500 classified employees rated, only 431 didn’t qualify for a raise. Little had changed.

Except that salaries, instead of going somewhat higher, went much higher than inflation. The LLA noted, in terms of median pay, that this had risen 15.6 percent in the period studied, but most occurred between 2018 and 2020 after imposition of the new rules, with an increase then of 9.3 percent. Inflation over the 24 months from mid-2018 was up only 2.3 percent. A portion of that jump had to do with a one-time adjustment upwards in 2018 supposedly to reflect market trends.

And, expect state worker salaries to continue to outpace inflation. Built into the system – again, recall that the lenient evaluation system allowed over 96 percent of state employees to receive raises – is a minimum annual two percent increase, but for the lowest-wage occupations can go as high as four percent. Contrast this with the change from 2019-20 in first quarter average state weekly wages, which was just 1.7 percent. Again, not only do the overwhelming proportion of Louisiana state classified employees receive yearly pay raises in well in excess of inflation, but also above the typical private sector employee in the state.

As a result, the report noted that, even as the total number of classified employees had edged downwards over time by 3.8 percent, total pay costs actually increased 5.1 percent. Another fact lodged in the report helps in part to explain this: the increasingly top-heavy nature of the state’s bureaucratic structure. The typical private sector ratio, depending upon business, is anywhere from 5:1 to 20:1 employees per supervisor. Even the federal government has an estimated range of 7:1 to 10:1. But in 2013 in Louisiana state government, it was 4.45:1 and by 2020 had fallen to just 4.12:1. Having too many chiefs and too few braves needlessly adds taxpayer-supported positions, and higher cost ones at that.

In essence, the study ratifies that no real reform promoting efficiency occurred with the rules change taking effect in FY 2018. An overcompensated Louisiana state bureaucracy rumbles on, if anything even more exacerbated than ever.