Study: Delaware state employees better compensated than private sector

DOVER — A report released Monday by the Delaware Public Policy Institute — a nonprofit associated with the State Chamber of Commerce — concludes that while state employees earn lower salaries on average than comparable private sector employees, their benefits packages more than make up the difference.

The study, conducted by the American Enterprise Institute, was immediately criticized by the state employees’ union.

The 40-page report says the average state employee earns more money through a combination of salary, health care and pensions than the typical private employee.

“After controlling for education, experience and other factors, Delaware state government employees receive wages that are about 12.4 percent lower than those of similarly-qualified private sector workers,” the report states.

“But state government employees receive a benefits package that is approximately 53 to 102 percent more generous than is received by most private sector workers.

“In particular, health coverage, retiree health plan, and pension benefits are substantially more generous for state employees than for Delaware employees working in the private sector.”

The findings were sent to Gov. Jack Markell and members of the General Assembly. A spokesman for the governor did not respond to a request for comment.

Michael Begatto

Michael
Begatto

Mike Begatto, executive director of the American Federation of State, County and Municipal Employees Council 81, which represents about 4,000 state workers, blasted the publication as “garbage” and “another form of an attack on government employees.

“The problem is you can’t refute a bunch of lies,” Mr. Begatto said, although he did not offer many specific points he disagrees with.

The Delaware Public Policy Institute’s interim president, Bill Osborne, defended the report and its methodology. He said it uses averages and analyzes the value of benefits in several different ways.

The report has its impetus in several similar studies published within the past year, Mr. Osborne said. It is intended to inform the public about the cost of state employees’ compensation.

The average state of Delaware employee makes $48,967 annually, with benefits ranging from $36,563 to $48,230, depending on how future pension benefits are calculated.

In contrast, a comparable worker in the private sector in Delaware is paid $55,039 and has benefits totaling $23,775.

That leaves a typical state employee earning the equivalent of $88,530 to $97,197 while the average non-government employee receives $78,814.

The findings exclude teachers and law enforcement, who may have different salary and health care agreements.

According to Monday’s study, the average government employee is older, more likely to be a woman and more likely to be black.

Sen. Colin Bonini, R-Dover, who has repeatedly called for cutting state spending, said he agrees with the report’s conclusions. He calls them “obvious” although many lawmakers have taken an opposing stance.

Sen. Bonini said he is in support of proposed legislation to lock all future employees into a Health Savings Account rather than allowing

Bonini_Colin_AMG_3566 by .

Sen. Colin Bonini

them to choose a health care plan. The change would save the state — and taxpayers — millions of dollars and replenish a depleted health care reserve account.

The idea has been put in bill form but has yet to be introduced, Office of Management and Budget director Ann Visalli said.

Sen. Harris McDowell, D-Wilmington, the chairman of the Joint Finance Committee, is not supportive of the proposal.

“There’s a lot of other things we can do before we lay costs on the employee,” he said.

Mr. Begatto said the change would be “balancing costs again on the backs of state employees who can least afford that.”

For now, as evidenced by the report, state employees do have health care that in many ways exceeds what private workers get.

The state covers about 90 percent of the costs, a fact repeatedly emphasized by Delaware budget officials. Changing the health care share or plan would result in lower costs to taxpayers, the report says.

“Were Delaware to compensate state government employees at market rates, it would save between $260 million and $720 million in annual compensation costs,” it states.

Supporters aim to use the report as evidence of the need for alterations.

“Here are the facts and hopefully people who are charged with making public policy in the state of Delaware can rely on these as facts as we get into the end of the fiscal year because there are some tough decisions to be made,” said Mr. Osborne, who defended the study as independent.

But Mr. Begatto claimed Monday’s report is “misleading and delusionary.” He cited an article from the left-leaning Economic Policy Institute that seeks to debunk an earlier study from the American Enterprise Institute.

Rep. John Kowalko, D-Newark, believes the report should have used median salary, which is lower, instead of average.

Sen. McDowell, who said he has just skimmed through the report so far, criticized what he has read.

“It’s just another propaganda attempt to lessen government,” the Democrat said.

Reach staff writer Matt Bittle at mbittle@newszap.com

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