Buckeye Institute Releases New Report on Ohio Government Workers Compensation

The Ohio-based Buckeye Institute for Public Policy Solutionshas released an excellent report entitled The Grand Bargain is Dead, focusing on state government employee compensation packages and their effects on the state's financial solvency.

Author Matt Mayer notes that total compensation packages for state government workers far exceed their private sector neighbors by an average of 24.6 percent ($36, 858 v. $29, 586). This imbalance cannot be maintained by taxpayers. Mayer offers a list of cost savings that if enacted could save taxpayers billions, without laying off a single worker or cutting services.

Some of Mayer's noteworthy suggestions for savings are:

  • Realigning state compensation packages to match those of their private sector peers would save taxpayers over $2.1 billion dollars over 2 years.These are savings which can go toward eliminating the state's proposed $8 billion budget deficit for fiscal years 2012-2013.
  • Freezing pay of government workers at current levels to allow private sector pay to catch up. He estimates that this would take 9 years considering the annual private sector average wage increase is 2.46 percent. During this time he claims that taxpayers would save $105, 609 per worker.
  • Reducing the taxpayer pension match for state workers from 14 percent to 5 percent, saving taxpayers $291,890, 973 per year.
  •  Increasing the eligibility for pensions to age 67. Currently, Ohio government workers can retire with full pension benefits after 30 years. Many are able to "retire" in their fifties and come back into the system and engage in double dipping.    

Ohio lawmakers must seriously consider making changes to goverment worker compensation packages as they attempt to close the state’s $8 billion deficit. Government workers have had a cushy ride over the past two years, essentially being immune from the pain of job losses, pay cuts and freezes and losses in retirement accounts endured by their private sector counterparts. It is time that these workers compensation packages were adjusted to reflect the current economic reality. Or else it is likely Ohio’s economy will continue to stagnate as more and more money is siphoned from he productive sector to support unsustainable wages and benefits.