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Haslam’s budget proposes big changes for state employee longevity pay

By Bonnie Davis Guy
In the recent Tennessee State of the State address, Governor Bill Haslam proposed eliminating longevity pay for state employees. The new tier evaluation system works as follows, state employees with an evaluation of unacceptable will receive no raise, a valued employee will receive a two percent raise, advanced employees a three percent raise, and an outstanding employee a four percent raise. However, even these raises can be suspended if the state has a lean budget year.
Currently state employees have a longevity pay system in place. State workers with three or more years of service receive $100 for each year of service up to the max out at 30 years or $3,000. Many years due to budgetary issues, this has been the only increase state employees have received to counter the ever increasing cost of living and benefits. In fact, per a report from Pew Charitable Trusts, TN State employees are not only facing even higher health premiums in the future, they already pay more per month than government employees in other states.
Haslam’s new budget plan would end the existing longevity pay system creating instead a merit raise pool. His plan would put half of the budgeted longevity pay money into the affected employee’s base salary. The rest of the funds would go into a merit pay pool. Merit pay would be based on even tougher performance based evaluations and again in lean budget years no increase would be available to state employees.
A press release from the TN Senate Democratic Caucus is solidly opposed to Haslam’s plan stating, “The plan to slash longevity pay takes money out of the state employees’ paychecks without doing anything to improve our state’s work force.” Senate Minority Leader Lee Harris said, “The Governor proposing taking part of an employee’s paycheck, using that money to create a pool of money and then giving the money right back to the same employees and calling that process a raise is a hard sell. That is not what most people in the private sector would ever call a raise.” As it stands, longevity pay is part of each long-term employees’ expected income. Employees have come to not only expect this income but to depend on this established income. They have had no reason up to now to suspect their pay would decrease. Longevity pay is also factored into retirement benefits. Subsequently eliminating longevity pay would also impact workers retirement benefits as well as regular pay.
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