Henry Bayer, executive director of AFSCME’s Council 31 laid a huge egg with this claim in an interview with Illinois Statehouse News last week:
State employee salaries are a minor fraction of the over-all budget; probably about five percent of the overall budget. Illinois doesn’t have a huge deficit because state employees make too much money. Illinois has a structural deficit because of our antiquated tax system, because the rich people don’t pay their share of taxes….[emphasis added]
The startling claim about the “minor” impact of employee salaries may be in some way correct because when he said “salaries” he might have intentionally left out all those unfunded pension and other benefits that are graciously bestowed on public employees by public taxpayers and creditors.
Let us turn then to the Illinois Policy Institute, which has analyzed those labor costs:
One out of every for dollars from general funds is spent on public employee compensation.
For Mr. Bayer’s benefit, that would be about 25 percent. Here are the institute’s calculations in its paper, “Civil Service Labor Costs:”
In fiscal year 2010, Illinois spent $26.3 billion on regular appropriations from general funds. Subtracting $400 million in unspent appropriations and adding in $3.2 billion in transfers out and $4 billion for the state’s annual pension contribution (most of which was borrowed), general fund spending comes in around $33 billion. From this, $9.2 billion went toward the salaries, benefits, and pensions of state employees.
Unless my math fails me, that’s more than 28 percent. But, it seems far less if you leave out all the non-salary labor expenses, as Bayer did, especially if you leave out the huge costs of pensions. To emphasize: salaries, benefits and pensions of state employees came to $9.2 billion, hardly a "minor fraction."
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