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Governor's Budget Message a Mixed Bag for State Employees

December 6, 2006

Pierre, SD - Governor Rounds has recommended a three percent salary hike with no health insurance increases for state employees next year. Corey Landeen with the South Dakota State Employees Organization says they're pleased healthcare costs won't be going up, but disappointed that the Governor's proposed 3 percent salary increase falls short of the 4 percent requested. Landeen's group will look at ways to fund the increase through legislation.

"Maybe one-time funding, just to give the employees a little extra. They took a pretty good hit last year with the health insurance increases. I think the lack of an increase this year reflects the amount that the employees had to pay last year. We're still going to look for every way we can to help them out."

According to Landeen, state employees faced an out-of-pocket 18 percent increase for health insurance premiums last year. As a result, the state achieved more savings than anticipated this year, but healthcare costs are still rising, and the state will pay a bit over 4 percent more next year to cover healthcare costs for its workers. He says the figures still amount to less than other state's increases, including nearly 23 percent in North Dakota and 21 percent in Wyoming.

"I think the employees have done a good job. The state has done a good job in managing the plan and cutting utilization, which has lowered the cost and therefore that reflects the request this year for the 4.2 percent increase."

Landeen commended Governor Rounds for going out of his way to be fair to the employees.

"I think he's doing a good job trying to get us there. We're trying to change the philosophy in this state of what's good and what's not good. In South Dakota it's not just a state employee issue, it's an issue of wages in general, which are low throughout our state. We need to find ways to pick up both the private and the public sector in South Dakota."

Landeen adds the wage increase also includes an extra 2.5 percent for state employees who earn below the midpoints of their salary ranges.

David Law/Eric Mack, Public News Service - SD