Do state workers have it too good? Although public employees pose a tempting target for budget cutters, the differences from private sector compensation are sometimes more complex than they appear BY BRIAN C. JONES

WHEN KAREN Russell signed on as a state worker in March, she relished the idea of doing the work her master’s degree prepared her for — as a vocational rehabilitation counselor — plus the prospect of a big pay hike.

The first part happened. Russell is indeed working with disabled people who need training and other help to reenter the workforce. Her caseload, in fact, thanks to a shrinking workforce, is increasing and she now has about 100 clients.

But even though her annual salary jumped by 48 percent, from $26,500 at a nonprofit agency to $39,200 with her job at the state Department of Human Services, the pay part didn’t work as neatly as Russell expected. What she didn’t realize was that the state would immediately take a substantial chunk of her pay — 8.75 percent — the amount that state law requires employees to contribute to the retirement system.

Because of that and other deductions, Russell’s every-other-week paycheck showed a $400 increase over what she had been earning. "I’m making more," she says. "It isn’t as much as I thought it would be."

Russell’s case illustrates how, even though state workers often seem to have better terms than their counterparts in business, the differences sometimes aren’t quite as they appear. And what now worries Russell and many of the state’s 15,400 workers is the possibility that they could lose more from their paychecks, as Governor Donald L. Carcieri and the General Assembly work to trim an unruly state budget.

The Republican governor — swept into office as a reform-oriented businessman and now immensely popular because of his handling of the Station nightclub disaster — has proposed major reductions in benefits for state workers. "These changes are in no way meant to suggest dissatisfaction with our state employees," Carcieri told the legislature in March. "To the contrary, the vast majority are doing outstanding work. Rather, these changes are a recognition that our employee benefit package is simply too generous."

Carcieri isn’t alone in looking at labor costs to close budget gaps. In financially crippled Cranston, Mayor Stephen P. Laffey trimmed benefits of police and fire retirees. Providence Mayor David N. Cicilline has laid off some city workers and the school board proposed slashing more than 120 jobs. In hard times, government workers are irresistible targets for budget-cutters, because personnel costs are such a big portion of spending. But cuts in pay, benefits, and jobs themselves are perilous. Ultimately they mean rollbacks of government services. Or they can boomerang, driving up overtime costs, for example.

In Carcieri’s case, much of the focus has been on one of his proposals — to increase the amount of money employees pay towards pensions by an additional two percent, then reducing the state’s payments by the same amount. But Carcieri’s plans are actually much broader than that, and taken together, would amount to a substantial financial blow to state employees.

Carcieri’s has a three-part plan to curb workers’ costs:

• Pension cost-shift: Next year, the required contribution of state workers would increase by two percent of their salaries, to 10.75 percent.

• A wage freeze: The governor included no annual pay raise in his budget for next year.

• Health insurance co-payments: Carcieri has said he’ll ask workers to pay a portion of premiums, currently entirely paid for by the state.

Taken as a whole, the three initiatives could amount to a six percent salary cut, according to one estimate by the Phoenix (see "Adding it up," page 9).

All of this has yet to happen, because the Democratic-controlled General Assembly — where organized labor has powerful influence — hasn’t acted on the pension cost-shift and wage freeze proposals.

And although Carcieri has signaled his intention to ask for health premium "co-sharing," only seven of the state’s 39 union contracts are open for negotiation this year. So for most workers, a change — even if it’s agreed to — is at least a year away. But clearly, the governor is drawing considerable attention to the state’s workforce costs, raising the question of whether state employees are better compensated than the taxpayers who support them.

Some union leaders worry that, along with the economic impact of Carcieri’s moves, the governor is uncaging public anger and resentment of state workers that never seem far from the surface.

"While the governor may be well-intentioned and maybe politically correct, he’s attempting to tarnish the image of public employees, since the general public has reservations about government," says Nancy R. Reed, president of the Rhode Island Alliance of Social Service Employees, Local 580.

"The governor is trying to portray public employees as public enemies," adds Reed, whose union represents about 1100 workers, including Karen Russell.

Indeed, after Carcieri began making his benefit-cutting proposals, Providence Journal editorial columnist Edward Achorn indulged in some old-fashioned worker bashing. Achorn wrote that the state’s budget problems are the fault of powerful constituencies: "public employees, in particular, feast at the public trough, gaining lavish pay hikes and benefits that far outstrip those of many of the less fortunate citizens forced to pay for them."

Carcieri, who is as warm in person as he is on the campaign trail, has never put the issue that crudely. But his three-pronged attack on state employee pay and benefits raises a familiar question:

Do state workers have it too cushy?

HERE ARE some general points:

On average, public workers appear better paid than those in the private sector. But there are plenty of instances where state jobs are paid lower than what private business offers. As to health insurance, Rhode Island state workers unquestionably have a better deal than most of their private sector counterparts, since the state pays all of their premiums.

In terms of pensions, there seems to be no clear answer on whether Rhode Island’s plan is better that those in other states. Nobody disputes that state workers pay a big price for their benefits in contributions, or that they receive solid benefits when they retire.

Beyond that, hard facts are difficult to come by.

There don’t appear to be many job-for-job comparisons of government versus private sector workers, and the debate is somewhat skewed by sometimes confusing figures cited by partisans in the debate — the governor included.

For example, during an April 9 talk to the Rhode Island Business Expo, Carcieri was quoted in the Providence Journal as saying the average state salary is $51,000, compared to $30,000 in the private sector. Yet on April 30, administration officials told the General Assembly that the estimated average salary in 2001 was $41,803. This prompted George H. Nee, secretary treasurer of the state AFL-CIO, to joke that within just a matter of weeks, the governor had succeeded in lowering the wages of state workers by nearly $10,000.

One of the few objective-sounding sources of information comes from the federal Bureau of Labor Statistics, which compiles an annual "National Compensation Survey" comparing private and public pay. Like most such studies, it’s a couple of years out-of-date, and it doesn’t exactly answer the question. Its Rhode Island figures come from the Providence and Warwick areas of Rhode Island and the Fall River area of Massachusetts, and both local and state workers are lumped together.

The report says average annual earnings for the area’s public workers were $41,880 in 2001 — close to the administration’s latter number for that same year. The report says private workers averaged $33,871 in 2001 — $8009 less. But the same report says public sector workers earn more in neighboring states: Connecticut’s average is $51,512; the Bay State’s is $44,570.

Category by category, the figures seesaw back and forth.

In the Rhode Island area, the survey shows "professional specialty and technical" workers (engineers, scientists, computer analysts,) make less as a group ($50,051 private/$48,452 government). But few individual jobs are broken out. Registered nurses under this heading earn about the same in both sectors ($50,882 private/$50,591 public).

Administrative support and clerical workers earn less in the public sector ($29,409 private/$22,671 public). Administrators and managers earn more ($65,566 private/$68,541 public). Blue-collar workers get more in government ($28,334 private/$32,652 public).

Experts say that the state rates may be somewhat higher because of the premium earned by jobs requiring education and skill — university professors, health chemists and social workers, for example — or that some jobs — such as those of prison guards — are simply hard and unpleasant. Also, some argue that the averages give a misleading picture and that thousands really earn much less:

The state’s largest union, Council 94 of the American Federation of State, County and Municipal Employees (AFSCME), represents about one-third of the state workforce, or 5393 people.

Legislative coordinator Jim Cenerini says the union’s own wage survey showed that virtually all of its members earn below the cited average. Seventy-three percent average $28,053, and another 24 percent get an average $38,438.

Asked whether state workers are overpaid, Robert J. Higgins, state administration director, answers elliptically: "Are basic salaries out of line? I think they are what they are, based on a series of negotiations."

Nee, the AFL chief, says state workers do not make exorbitant salaries, nor is the burden of paying for the workforce as heavy as the administration is making out to be. "I think the average people we represent get $35,000 to $40,000 at most," Nee says. "This idea that folks making $35,000 to $40,000 are breaking the bank is patently ridiculous."