SADOW: Jindal’s Pay Decision Could Make For A More Efficient Bureaucracy

The silver lining for Gov. Bobby Jindal having the misfortune to govern through a period where subpar policy decisions at the national level have caused economic malaise that eroded Louisiana’s finances is that he could use this to spur policy innovation to make state government more efficient. Having worked out this way in health care and corrections, to name two major areas, this may be extended to classified personnel pay policy.

In the past few years, Jindal has spurred changes to better align health care resources to needs, to make Medicaid work better, and to get the state largely out of the business of direct health care provision, savings hundreds of millions of dollars annually as a result. More has been saved by introducing operating efficiencies into the prison system through technology and judicious closings. While it may be that the atmosphere of fiscal difficulties prodded him to seek these aggressively, that he did so indicates his natural inclinations led him.

But one area where he found himself mostly unsuccessful was in civil service pay reform, especially in tying pay to performance of classified employees. His most far-reaching proposals ended up getting watered downby the State Civil Service Commission, which would have included such a measure. Presently, the norm for departments in giving pay raises of 4 percent to whomever does not get rated as “unsatisfactory” – which ends up, in a figure hardly changed over the years even after the most recent reforms – at 1 percent or less of the total.

That is, when a normal (that is, not tied to a promotion, meeting certain job-related criteria, etc.) raise actually is funded to occur. This has been hit-or-miss over the past few years, with few agencies able to grant them because their funding has not been appropriated in the last few budgets. However, agencies have discretionary auhtority within their overall budgets that if they produce savings in other areas they can give raises or bonuses, and while only a few instances of that occurred before last year, this year a number of them have been able to parlay that into full 4 percent raises for the roughly 99 percent of their employees deemed to have performed at a satisfactory level.

Yet in one instance, that of the Department of Revenue, it argued in front of the SCSC, which must approve of all pay raises not given at 4 percent (technically, all employees rated in all but the lowest category automatically receive raises of 4 percent annually on Oct. 1, but agencies that can’t do that must explain why not and seek approval), that it could afford to give only those rated “exceptional” the full amount while those rated “successful” would receive just a 2 percent bump. Further, they would be one-time bonuses. This halfway replicates what Jindal had sought, which would have allowed agencies to grant permanent higher raises to better-performing employees. Without objection, including the representative of state classified employees, the SCSC approved.

This set a significant precedent. The next step would be to transfer this to permanent increases. While this would not have the same effect as that originally sought by Jindal, because it would work only when agencies were asking for exceptions and would not be across-the-board, it does move closer and makes it politically easier to implement that policy for all situations for all agencies automatically in the future.

Whether Jindal scaled back his initial idea of tying pay to performance because he felt only an incremental change would be accepted or because he figured Pres. Barack Obama would continue to make policy that would dampen the national economy and therefore the state’s to moot any discussion of budgeted raises, or both, following the course he did now has produced a small victory. Whether he or his successor will try to capitalize on this momentum is another matter, but this could result in substantial savings for taxpayers. Based on Revenue’s distribution of evaluation scores (53.56 percent in the middle category) and the average classified state employee salary at present employment numbers, by paying the middle category only 2 percent raises that would save annually (without factoring compounding effects of future years) about $23 million and produce a more efficient workforce, knowing its remuneration now will be based on finer performance gradients.

This largely overlooked decision may have opened the door to something bigger and better for the citizenry. Let’s hope similar wisdom prevails in the future both in SCSC decision-making and in legal changes to guide it in that direction.

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