Bill Ritter prepares to submit next year's budget proposal to the legislature's Joint Budget Committee in November, he announced today he will recommend that state employees not receive performance-pay salary increases in fiscal 2009-10.
The move would save taxpayers $36 million and affect more than 26,000 state employees.
's overall economic outlook remains healthy and we have much to be optimistic about, especially when compared to other states and relative to national and international economic challenges," Gov. Ritter said. "But these challenges require us to plan prudently for the future so that we are protecting taxpayer dollars and ensuring state government is able to continue providing essential public services. Colorado
"By withholding performance-pay increases, tens of thousands of state employees are being asked to help serve as responsible stewards of taxpayer funds. This is a pro-active and precautionary step that will give us even greater flexibility should we need to take additional budget-saving measures down the road."
Performance-pay increases, first initiated in fiscal 2002-03 by the legislature and former Gov. Bill Owens, are based on employees' on-the-job achievements. They supplement more standard salary increases that are based on market surveys.
Prior to 2002-03, employees received annual pay increases based on the market surveys, plus an automatic 5 percent increase after five years of service and another 5 percent increase after 10 years of service.
Since their inception, performance pay increases have not been granted for budgetary reasons in FY 2003-04, FY 2005-06 and FY 2006-07. In the years that performance-based pay increases were granted, they have ranged from 0.5 percent to 5 percent (in FY04-05). Salary-survey-based pay increases have ranged from 2 percent to 3.8 percent during the past few years.
Gov. Ritter's Office of State Planning and Budgeting estimates a general fund savings of $21 million, plus another $15 million from outside the general fund, by forgoing performance-based pay increases in 2009-10, which starts July 1, 2009.
Gov. Ritter's FY09-10 budget proposal is scheduled to be submitted to the Joint Budget Committee on Nov. 1. Gov. Ritter and Budget Director Todd Saliman will present budget highlights to the JBC later in November.