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January 31, 2001     (512) 463-0300

Senators Considering
State Employee Pay Raise

AUSTIN - Pay raises for employees of the State of Texas was a topic on many minds at the Capitol on Wednesday, January 31, 2001.

The Finance Committee held a special hearing at 7 p.m. Wednesday. Houston Sen. Rodney Ellis, the chair of the committee, said the idea behind the timing was so state workers could testify without having to miss work.

More than 200 persons, ranging from budget experts to state workers to lobbyists, packed the Finance Committee hearing room and parts of two overflow rooms for the unprecedented night time hearing. The committee also heard from representatives from Motorola and Southwest Airlines, who told the senators about great lengths to which private-sector employers go to attract and retain top employees.

After hearing from numerous expert witnesses, the panel took testimony from among the scores of state workers who were at the Capitol for the hearing.

Jane McFarland, the chair of the Small State Agency Task Force, a group of approximately 75 agencies with fewer than 100 employees, told the committee members that employee turnover is a major problem.

"Turnover is very critical for these small agencies," McFarland said. "We believe low pay is at the heart of this turnover."

Joe Thrash, a 27-year state employee and a candidate for the Texas Employment Retirement System board of trustees talked about employee dissatisfaction with state benefits, which he said used to be good enough to offset lower pay.

"They are not comparable to what's available in the private sector," Thrash said. He added that he has seen many people leave state employment for the private sector because the private sector now offers better benefits.

The subject of state employee pay first came up Wednesday in a morning press conference, where the Texas Public Employees Association (TPEA) called on the Senate Finance Committee to include an across-the-board 8.25 percent increase in each year of the 2002-2003 biennium.

The Senate Finance Committee, along with the House Appropriations Committee, writes the legislation each session that sets budgets for all state agencies and outlines Texas' general spending priorities for the following biennium, or two-year period.

TPEA Executive Director Gary Anderson said reports issued last year by the State Auditor's Office indicate that high employee turnover is costing Texas several hundred million dollars in recruitment and training costs. Anderson said the high turnover is caused by experienced workers leaving state jobs for higher-paying jobs in the private sector.

Senators Tom Haywood of Wichita Falls, a member of the Finance Committee, and Todd Staples of Palestine and State Rep. Elliott Naishtat of Austin joined Anderson at the press conference. Staples said finding a way to give state employees a pay raise should be a high budget priority this session.

"I think we all realize that the wheels of state government turn because of dedicated men and women who provide a valuable service to all Texans," Staples said. "And, clearly, this is the correct approach to take to provide reasonable and rational solutions."

Ellis later told reporters that he agrees that state employees should get a pay raise, but cautioned that the 2002-2003 budget will be tight.

"A top priority for all of us in state government is to try and avoid a potential crisis in terms of the turnover rate among state employees," Ellis said. "I think that state employees are some of the hardest-working individuals in the state of Texas. We did give them a modest pay raise last session, not nearly as much as we would like to have given, but we did make some progress. And I'm hopeful, depending on resources, that we can make even more progress this session."

Ellis said he would like to be able to fund an across-the-board pay raise combined with targeted increases in areas with particularly high turnover. He added that the Finance Committee has formed an informal working group to study the turnover rates and determine how effective pay raises would be in reducing turnover. A prison guard pay increase is also a top priority, Ellis said.

In session, the Senate approved Gov. Rick Perry's nomination of Grace Shore to chair the State Board of Education. Shore is from Gregg County. Her term will expire on January 1, 2003.

The Senate is adjourned until 11 a.m. Thursday, February 1, 2001.

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