Beginning on Monday, March 16 and concluding yesterday, April 2, the Senate Appropriations committee held 35 hearings at which time each state department acting secretary testified to the committee as to their specific department budget for the 2015-2016 year.
Sen. Pat Browne from Lehigh County is the Chairman of the Senate Appropriations Committee.
Sen. Browne is a certified public accountant and attorney. He also was a tax manager for Coopers and Lybrand from 1990 to 1994 and a tax supervisor for Price Waterhouse from 1986 to 1990.
I would like to point out that I am impressed with Sen. Browne’s leadership on the Appropriations Committee, his level of expertise in tax matters, his knowledge of the law as it relates to the budget and his knowledge of the Pennsylvania budget.
I am also honored to be working with other senate members who have spent a great deal of time and effort getting a grasp on Governor Wolf’s breathtaking budget.
The committee hearings were very informative and went into great depth of each department.
The area that I find most troubling is the excessive cost of benefits for state employees.
In the private sector world the percentage of benefits over and above an employee’s annual compensation would rarely ever exceed 50 percent and in most private sector industries the percentage is closer to 40 percent.
The documents show the largest driver of the benefits are health care and pension costs – they are wildly out of control.
For example, the Department of Corrections benefits are in the range of 73.5 percent to 79.3 percent over the annual compensation of each employee.
The average corrections worker makes approximately $55,911 annually – add on 73.5 percent for benefits for a grand total cost per corrections employee of $97,005 annually – the benefit cost is a staggering $41,095 per employee.
Using the private sector benefit factor of 50 percent on a corrections employee’s annual compensation of $55,911 annually the benefit cost would be $27,955 per year instead of $41,095 – a reduction of $13,949 per corrections employee.
The Department of Corrections has 14,770 employees – multiply 14,770 employees times $13,949 per employee and the Department of Corrections is paying at least $206 million dollars more in benefits than the private sector using a 50 percent benefit factor.
If I used a 40 percent benefit factor instead of 50 percent the state is paying $276 million dollars more than the private sector just for the Department of Corrections.
The Department of Corrections is only one department and the silent creeping of benefit costs for PA state employees is why we are financially where we are today.
Include all departments in the state and PA is clearly paying in excess of $1 billion dollars annually more than the private sector and has been creeping up for years – this year just happens to be the year to pay up.
I will continue to send any pertinent budget information to you all as we get closer to the June 30 budget deadline.
My prediction is that we will not meet the June 30 budget deadline and it is going to be a long, hot summer in Harrisburg.
At this link are documents that detail the state departments benefit rates.
Sen. Wagner represents the 28th Pennsylvania Senate District.