State Worker Benefits and the Budget Crisis: What Do the Voters Say?

The political battles carried out between government workers and budget hawks in state capitols across the country have made national headlines for months.  From the massive public union protests in Madison, Wisconsin to the Minnesota state government “shutdown” resulting from failure to pass a state budget, state government workers and their salaries and benefits have taken center stage in the fiscal crisis gripping most states.

Here in North Carolina, the fate of state employees and their benefits was the subject of a significant share of political posturing on the state budget. Indeed, Gov. Bev Perdue criticized the budget plan put forth by the state House of Representatives as one that would slash up to 30,000 state workers. That scare tactic didn’t square with reality. Still, the message was clear: “protecting” state workers and their benefits had clearly become a divisive political issue.

But is it a winning issue? How does the public feel about government employee benefits?

Recently released polling data reveals that North Carolina registered voters believe state workers have been “protected” enough.  Results show significant voter opposition to increasing taxes to finance public sector salaries and benefits.

Instead of tax hikes, voters strongly favor increasing employee contributions to help finance state worker health and retirement benefits. Also of note is significant support for reforming how the state employee pension plan is structured and funded.

More specifically, poll results show:

Voters recognize the state faces a significant fiscal problem; most blame careless, self-serving growth in spending for the state budget deficit

  • Seventy percent of registered voters acknowledge the state faced a budget crisis this year
  • An overwhelming majority of voters (75 percent total) blame elected state officials for the state budget difficulties. This total includes 49 percent that say elected state officials made careless and self-serving decisions, and 26 percent who believe state government spent too much money. Meanwhile, only 8 percent say the state government didn’t tax enough.

Voters strongly oppose raising taxes to support public sector salaries and benefits

  • A majority of registered voters (53 percent) say they would not be willing to have their taxes raised to maintain local and state public employee salaries and benefits.
  • A decisive 71 percent say that either cutting government spending (48 percent) or requiring current public employees to contribute more toward their benefits (23 percent) is the best way to address the problem of the state not being able to afford public employee benefits. Meanwhile, only 13 percent favor raising taxes to address this issue.

By a significant margin, voters support state public pension plan reform along with asking state government employees to contribute more to their health benefit plans

  • By a significant margin of 56 percent to 33 percent, registered North Carolina voters favor moving all new public employees from a defined benefit retirement plan to a defined contribution plan.
  • By more than a two-to-one margin (66 percent to 29 percent), North Carolina voters believe that the new rule requiring state employees to pay a share of their enrollment premium into the State Health Plan is fair.
  • In order to address the nearly $33 billion in unfunded health benefits for state retirees facing the state, a notable majority of North Carolina voters believe the best approach is to either require current employees to contribute more toward their health benefits (35 percent) or cut government service programs (17 percent). Conversely, only 14 percent would prefer taxes be raised to pay for these obligations.

Voters across North Carolina recognize the state’s fiscal crisis. Increasingly, voters are also recognizing that generous state employee benefits are a leading culprit in our budget woes. Gov. Perdue and others who declare their desire to “protect” state employee benefits by raising taxes may want to reconsider their stance in light of these telling poll results.

This article was posted in Budget & Taxes by Brian Balfour on September 20, 2011 at 11:16 AM.

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Comments on this article

  • 1

    Will Sep 21, 2011 at 15:29

    How much do those polled actually know about the benefits of a typical state employee? I can tell you it ain’t that great.

  • 2

    tallen Sep 21, 2011 at 19:26

    I have not run the numbers since 2007, so the disparity today is greater than then as no pay raises have been given since 2006. To raise the pay of state employees in 2007 to where they were in 1973 would require an increase in pay of about 25 percent at the lower end of the pay scale up to more than 45 percent at the higher end. Thus, the people of N.C. are getting a bargain today or were really getting ripped off in 1973.

  • 3

    yellowbird Sep 22, 2011 at 22:11

    How can retirees pay more when there have been no pay raises in several years? Most retirees are not working and rely on their retirement benefits. Of late they are shrinking. No, find some things to cut – not retiree benefits or health plan benefits!

  • 4

    Jennifer Sep 26, 2011 at 11:28

    I am a worker that will be affected by this. I have no desire to pay MORE out of my check, between taxes, insurance and what not I pay 43% already!!! I am a single mother trying to balance rent, retirement and still keep insurance for my little girl. When is our break??

  • 5

    Randy Oct 07, 2011 at 15:39

    Private sector employees have to contribute to their retirement plans. They have to pay part or all of their health plans,and currently have to pay for the public sector employees’ fat cat retirement plans through taxes as well. This is not right. Public Sector employees should have to contribute to their own retirement plans like everyone else. And as far as public sector employee’s not getting pay raises, the private sector have been taking pay cuts and losing their jobs.

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