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WATCHBLOG: Breakdown of salary, benefit cost drivers in next year’s budget

By   /   December 5, 2012  /   No Comments

By Eric Boehm | PA Independent

HARRISBURG – Pennsylvania’s general fund revenues are expected to grow about 3 percent in next year’s budget, but personnel costs will climb by nearly 8 percent, according to figures laid out by state Budget Secretary Charles Zogby during a Wednesday meeting with reporters.

Salaries for state workers will climb by 2.9 percent next year – a lower rate than the expected revenue growth – but the benefits for those same employees’ (and retirees’) is where the gap opens up.

Health care costs for current employees are set to climb by 9.4 percent, retiree health care costs are going up by 15.5 percent and pension costs will climb by 49.1 percent, according to the budget office’s figures.

Take a look at the full breakdown for an average employee:

Total personnel costs for state government will climb 7.9 percent in 2013-14, mostly due to benefit costs instead of salary.

Zogby said there is not much that can be done since salary and benefit costs for most employees are written into contracts.

“This is the reality of what is already in place,” he said.

Overall, the state has about $1.3 billion in new mandatory expenditures next year, but is only expecting about $800 million in new revenues.  You can see the various cost-drivers – and how the revenues stack up – here:

Projected new revenues and cost-drivers in the 2013-14 budget

You can see the rest of the mid-year budget briefing here.

Contact Boehm at [email protected] and follow @PAIndependent for more.