Fiscal impact
reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for
standing finance committees of the NM Legislature. The LFC does not assume
responsibility for the accuracy of these reports if they are used for other
purposes.
Current FIRs (in
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Previously issued FIRs and attachments may also be obtained from the LFC
in
|
SPONSOR |
Varela |
DATE TYPED |
|
HB |
177 |
||
|
SHORT
TITLE |
Public Employee Cost-of-Living Increases |
SB |
|
||||
|
|
ANALYST |
Johnson |
|||||
APPROPRIATION
|
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
||
|
FY04 |
FY05 |
FY04 |
FY05 |
||
|
|
$86,502.6 |
|
|
Recurring |
General
Fund |
|
|
$11,628.5 |
|
|
Recurring
|
Various |
|
|
|
|
|
|
|
(Parenthesis
( ) Indicate Expenditure Decreases)
Relates to Appropriation in the General Appropriation
Act
LFC Files
Responses
Received From
State
Personnel Office (SPO)
Responses
Not Received From
Commission
on Higher Education (CHE)
State
Department of Public Education (SDE)
Administrative
Office of the District Attorneys (AODA)
Administrative
Office of the Courts (AOC)
SUMMARY
Synopsis of Bill
House Bill 177
appropriates $86,502,600 from the general fund and at least $11,628,500 from
various other agency funds to the department of finance and administration for
the purpose of providing a 3% salary increase to public employees. The salary increases apply to public school
employees, faculty and staff at public post-secondary educational institutions,
executive classified employees, executive exempt employees, legislative
permanent employees, judicial employ-
ees and district
attorney employees. The bill contains
language to ensure employees whose salaries are funded from non-general fund
appropriations will be covered by the same salary increase provision provided
in the bill.
The salary increase
would be effective the first pay period after
Significant Issues
The salary increase is important to help offset
rising expenses, such as the fast growing health insurance premiums. The increase would assist all agencies and
public school and higher education institutions to recruit and retain employees
and help maintain equity and remain competitive with comparator markets.
The State Personnel Office reports that, as
drafted, there is not adequate funding appropriated to provide classified
employees with a 3% salary increase.
Salary changes, appointments and separations between the initial salary
projection in early October, 2003 and an updated January, 2004 salary
projection show that it will cost an additional $334,706, requiring a revised
appropriation of $13,985,606 for the classified service and a total revised
appropriation of $86,837,306 to public employees.
FISCAL IMPLICATIONS
The appropriation of
$86,502.6 from the general fund and at least $11,628.5 from various other
agency funds contained in this bill is a recurring expense to the respective
funds. Any unexpended or unencumbered
balances remaining at the end of fiscal year 2005 shall revert to the general
fund or other designated fund.
ADMINISTRATIVE IMPLICATIONS
Affected agency
personnel staff including that of SPO and the Human Resource System Team at the
Information Systems Division of the General Services Department can implement
the proposed salary increase using the current Human Resource Management
System.
COMPANIONSHIP RELATIONSHIP
This bill relates to
the compensation increase in the General Appropriation Act, as introduced,
which included a 1% compensation increase and a 1% lump-sum salary enhancement
for all public employees as referenced above.
This bill relates to
HB128 and HB167 which provide for special compensation changes for specifically
identified groups.
OTHER SUBSTANTIVE ISSUES
The State Personnel
Office notes the following issues with regard to the executive classified system:
·
This bill provides for a cost-of-living increase. There is no performance criteria. Each employee would receive a salary
increase, even those who have unacceptable performance.
·
The current classified service salary structure is set to represent 95%
of the comparator salary market. State
Personnel Office compensation staff tracks market, industry and economic trends
to determine the amount the salary structure should be adjusted each fiscal
year. This year’s data analysis supports
adjusting the salary structure by 2.4% in fiscal year 2005.
AMENDMENTS
The State Personnel Office provided the following amendments:
Section 1, Subsection A:
Eighty-six million five hundred two thousand six hundred eight
hundred thirty seven thousand three hundred six dollars ($86,502,600)
($86,837,306) is appropriated from the general fund to the department of
finance and administration for distribution to the appropriate state agency for
expenditure in fiscal year 2005 to provide three percent cost-of-living
salary increases to public employees who perform at a “successful” level or
higher as follows:
Section 1, Subsection B, Part (3), subpart (b):
thirteen million six hundred fifty thousand nine hundred nine hundred
eighty five thousand six hundred six dollars ($13,650,900) $(13,985,606)
dollars for classified employees;
CJJ/njw