Senate Republicans Call for Murphy to Implement Real Wage Freeze for State Workers

The fifteen members of the Senate Republican caucus sent the following letter (click here for PDF) to Governor Phil Murphy calling for a real wage freeze for State employees to address a multi-billion dollar budget shortfall, calling the administration’s limited efforts to achieve payroll savings “too little and too late.”

The full text of the letter is below:

June 25, 2020

Dear Governor Murphy,

At a time when you are seeking legislative approval to borrow as much as $14 billion to support spending through the next fiscal year, our caucus remains concerned by the extremely limited nature of the steps your administration has taken to cut costs as necessitated by the public health emergency.

For months, the Legislature and our caucus have offered solutions that could help close revenue shortfalls, protect the financial well-being of State employees while producing significant payroll savings, and support the ability of private sector employers to survive the lockdown and safely reopen to boost the New Jersey economy and the State’s tax revenues. Inexplicably, your administration has repeatedly declined the bipartisan outreach of the Legislature to work in a collaborative and transparent fashion. Instead, the unilateral actions you have taken have repeatedly been too little and too late.

For example, after you refused calls for more than a month to take action on proposed payroll savings, the Legislature approved a bill (S-2350/A-4132) in mid-May allowing the State to more easily and quickly furlough public workers, while protecting them from pension impacts. Many of those employees, forced to stay home and unable to perform their regular job duties due to COVID-19, have been paid their full salaries since the beginning of this crisis at taxpayer expense. While we hoped our legislation would have prompted you to act responsibly, the bill has sat on your desk untouched and unsigned for six weeks. Had you signed the bill into law and implemented furloughs immediately, the State could have taken greater advantage of generous federal unemployment benefits that would have paid more to most furloughed employees than they were making during that time by remaining on the State payroll while at home and not working.

Instead, a week after we sent the comprehensive furlough bill to your desk, you announced a voluntary furlough program. We have seen no evidence this program has been utilized to any extent or that it has produced any notable savings. This approach was clearly too little.

Two days ago, you announced a preliminary agreement with the Communications Workers of America (CWA), the state’s largest public employee union, that includes a limited furlough program. By not implementing broad furloughs months ago when much of New Jersey, including most government offices, were shut down, the opportunity to achieve savings has been greatly diminished. Further, the additional $600 of weekly Pandemic Unemployment Compensation appropriated through the federal CARES Act is set to expire before the end of July, leaving workers who are furloughed after that date with far less financial support than if furloughs had been implemented earlier, as urged by the Legislature. According to the CWA, the number of furlough days has been limited to 10 days to allow those days to be scheduled prior to the expiration of the additional federal benefit. For those reasons, your announcement is clearly too late.

Additionally, we are concerned that you have failed to implement a simple wage freeze for State employees given the scale of the budget shortfall cited by the administration. We note that former Governor Corzine sought a pay freeze in 2009 when the State’s financial crisis was far less severe. At the time, his proposal estimated savings of more than $200 million.

Instead, the preliminary agreement you announced with the CWA simply defers planned cost of living adjustments (COLA) for wages until later next year. This agreement is so weak that the CWA is advising its members, “By the end of the contract, you will get every raise promised. We have not given up any raises.” Despite the upcoming 2% COLA being deferred for CWA members, it does not appear the administration has made any effort to freeze the regular step increases provided to most State employees, which result in annual pay raises of approximately 4% on the anniversary date of an employee’s hiring. In a regular year, the COLA and step increase combine to provide most State workers with a 6% pay raise. As a result of the agreement you negotiated, some State workers will simply have their pay increases trimmed slightly from 6% to 4% over the next 12 months, far from a real wage freeze. In fact, those workers will now get 8% pay raises in FY 2022, including two COLAs and a step increase, under this agreement. When you have failed to take reasonable steps that even Governor Corzine would have taken, it again appears you have done too little.

Had step increases been frozen in March, you could have prevented the 4% pay increases that a quarter of State employees received over the last three months on their hire dates, which the State could ill afford. Absent an announcement that step increases will be frozen going forward, the cost will compound over the next year when those employees and others receive their next increase and another 4% raise. Given the lack of action on this front by the administration, we can’t even say you are too late.

For an administration that has made “fairness” a guiding principle, it hardly seems fair to dole out massive pay raises to public employees when the taxpayers who pay the bills continue to suffer under the lingering effects of lockdown orders on private sector employers. Those raises don’t seem fair when you have simultaneously threatened to cut funding for the Senior Freeze and Homestead Benefit property tax relief programs that many middle-class and elderly residents rely upon to afford living in their homes.

By delaying and avoiding action to achieve payroll savings, the administration continues to dig the State budget into a deeper hole. We advise you to stop digging, and we urge you to implement a real wage freeze that is justified given the situation.

Sincerely,

Thomas Kean
Leader

Steven Oroho
Budget Officer

Kristin Corrado
Conference Leader

Joe Pennacchio
Whip

Robert Singer
Deputy Leader

Chris Brown
Deputy Conference Leader

Kip Bateman
Deputy Whip

Anthony M. Bucco
Senator – District 25

Gerald Cardinale
Senator – District 39

Christopher Connors
Senator – District 9

Michael Doherty
Senator – District 23

James Holzapfel
Senator – District 10

Declan O’Scanlon
Senator – District 13

Michael Testa
Senator – District 1

Samuel Thompson
Senator – District 12