On the eve of his inauguration to a second term, Pennsylvania Gov. Ed Rendell figured out a way to spend a couple billion of our tax dollars. What's another $2.1 billion among friends?
I'm not sure how to greet the news that 45,000 state workers will get pay increases averaging 22.4 percent over the next four years, including a cash bonus of $1,250 for agreeing to take those hefty raises.
It's very generous of Gov. Rendell to share the wealth. For the past two years, we've only been hearing of state politicians and judges getting big fat paychecks from the taxpayers of Pennsylvania. (I hate to keep rubbing it in, but that $1,250 cash bonus is $1,250 more than I got back from the tax cut Ed Rendell promised me when he first ran for governor in 2002).
At least the deal with Council 13 of AFSCME, the American Federation of State, County and Municipal Employees, means that working people will also see a boost in their take-home pay.
Under the agreement, which would take effect July 1, state workers will receive a bonus of $1,250 in the first year, followed by pay increases of 3 percent, 3 percent and 4 percent in the second through fourth years, according to the Associated Press.
The tentative agreement, given overwhelming support from the union's Policy Committee on Jan. 13, provides for bonuses and wage increases of 22.4 percent for the average state employee over the life of the four-year agreement, according to union officials.
The total cost to Pennsylvania taxpayers is $2.1 billion. And this deal covers only 45,000 of the state's 80,000 workers. The pay raises are higher than the rate of inflation and much higher than the typical 1.5 percent or 2 percent many private sector workers are seeing in their paychecks for 2007.
And let's not forget that Pennsylvania workers also enjoy one of the best benefits packages in the country and one of the highest pensions when they retire.
This is why Pennsylvania is facing a massive pension crisis over the next five years when the pension fund for state workers, retired teachers and politicians is expected to experience a shortfall of several billion dollars. (Unlike most states, Pennsylvania provides lifetime pensions for elected state politicians and judges who serve a minimum of 10 years in office).
The state's looming pension crisis was recently documented by The Associated Press in a five-part series of articles. The taxpayers' share of the state's two large public-sector pension plans is expected to reach $3 billion a year by 2012. That's five short years from now.
The only good news for Pennsylvania taxpayers in Monday's contract announcement is the fact that state workers will be asked to contribute more toward their healthcare costs. Employees would increase contributions toward their health coverage from 1 percent to 3 percent of their pay, according to officials.
State workers are still coming out ahead. Private sector employees often pay 10 percent or more of their pay to cover healthcare costs. And more than 1 million working Pennsylvanians have no health insurance coverage at all, something Rendell has failed to address in the past four years.
As Gov. Rendell takes the oath of office on Tuesday, let's remember that he got most of his support — votes and campaign contributions — from unionized workers, so it should come as no surprise that the governor is paying back his political supporters. (Council 13 of AFSCME reportedly kicked in $50,000 toward the cost of Rendell's inauguration festivities.)
Just keep your checkbook handy, folks. We'll be paying for Rendell's spending orgies for decades to come. And when you're writing that check out to pay your taxes later this year, be sure to thank everyone you know who voted for Ed Rendell.
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