State Employee Costs Up $500 Million

Transparency: State Employee Contract Analysis Shows Big Bill for Taxpayers
IFO Releases Cost Analysis Mandated by Recent Law

September 29, 2016, HARRISBURG, Pa.—Pennsylvania taxpayers are on the hook for more than $500 million in additional state employee costs over the next three years, according to a new analysis released by the Independent Fiscal Office (IFO) this week.

In April, Gov. Wolf signed into a law a transparency measure—Act 15 of 2016—mandating independent analyses of state employee union contracts before they go into effect.

"Prior to this transparency law, the public, and even lawmakers, learned the cost of these contracts only after the fact," commented Elizabeth Stelle, director of policy analysis for the Commonwealth Foundation. "Knowing the cost before contracts are ratified is a critical reform, but more work is needed to ensure the governor is accountable to taxpayers."

The first analyses under the new measure look at collective bargaining agreements with the two largest state employee unions, the Service Employees International Union (SEIU) and the American Federation of State, County and Municipal Employees (AFSCME).

These three-year contracts—which cover most state employees and are the basis for contracts with the remainder—will cost taxpayers an additional $507 million. This comes at a time when compensation costs per state employee are rapidly approaching $100,000.

To enable checks and balances in state contract negotiations, Rep. Garth Everett is sponsoring HB 2289, which would give the General Assembly the authority to rescind state labor contracts negotiated by the governor. The legislation passed the House State Government Committee this week.

"The lack of legislative oversight of the collective bargaining process is a glaring problem, particularly when these contracts are with major political donors, as in Wolf’s case," Stelle continued. "Lawmakers should seriously consider passing an additional check on the governor’s power to negotiate contracts with taxpayers’ money largely behind closed doors."

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