Tens of thousands of Missouri state employees, who rank as the lowest paid in the nation, would get a 2 percent pay raise under a proposal narrowly embraced Tuesday night by state senators.
The Senate voted 17-15 to defeat an amendment that would have stripped the pay raise out of the proposed budget for the fiscal year that starts July 1.
The raise had been one of the reasons why a coalition of nine Republican senators had spent two days stalling debate on the budget. The group of senators relented and allowed debate to resume on the budget after several other changes they had sought were made to the budget.
Missouri's proposed $24 billion operating budget would hold funding flat for public colleges and universities and provide a slight increase to K-12 public schools. It would reduce funding for various social services, including the foster care system, child-care subsidies to low-income working parents and a health care program for the blind.
The pay raise would go to about 46,000 state workers who earn up to $45,000 annually. That would cover about 82 percent of the state workforce and cost nearly $33 million, with almost $17 million coming from general state tax revenues and the rest from federal funds or earmarked state revenue streams.
According to 2010 figures from the U.S. Census Bureau, Missouri ranked last among all states with an average yearly salary of $36,985 for its state employees, excluding those who work at public colleges and universities. Missouri employees have not received a general pay increase since 2009.
"We've got state employees who are basically the working poor," said Senate Appropriations Committee Chairman Kurt Schaefer, R-Columbia, a proponent of the proposed pay hike.
The pay raise also would apply to prison guards, aides in mental health facilities and case workers in the Department of Social Services, among others. It would not apply to legislators, although they also earn less than $45,000 annually.
The cost of the pay raise exceeds the amount that the budget would cut from a state program that provides health care to more than 2,800 blind residents. Although the blind aid cut is not direct result of the proposed pay raise, the comparison was enough to make some senators squeamish about the public perception — particularly in an election year.
"I do have some heartburn about cutting blind health care benefits and giving state employees a pay raise," said Sen. Rob Schaaf, R-St. Joseph, one of the nine senators balking at the proposed budget.
Senate Majority Leader Tom Dempsey, who had negotiated on behalf of Senate leaders with the group of dissident Republicans, offered the amendment that would have eliminated the pay raise. He expressed concern that state revenues — particularly from the Missouri Lottery — might not meet expectations and that the pay raise would come at the expense of other state services.
"I'm just trying to be realistic. You can't spend money you don't have," said Dempsey, R-St. Charles.
Gov. Jay Nixon originally had proposed a 2 percent raise for all state employees, regardless of their income, that would not have begun Jan. 1, 2013, which is halfway through the next fiscal year. As passed by the House last month, the proposed budget would have provided a 2 percent pay raise — to begin July 1 — for workers earning up to $70,000 annually. That was scaled back earlier this month by the Senate Appropriations Committee.
Although disagreement remains over the pay raise, the dissident Republican senators appear to have been successful in forcing several changes to the budget during behind-the-scenes negotiations.
For example, Schaefer agreed to remove from the budget $50 million of federal funds that would have helped update the computer system Missouri uses for its Medicaid health care program. Some Republicans are concerned that the computer improvements would lay the framework for the eventual implementation of a health insurance exchange under the new federal health care law signed by President Barack Obama.
Although the state needs to update the Medicaid computer system, Schaefer said it could afford to wait on the outcome of the presidential election and the U.S. Supreme Court's ruling on a challenge to the federal health care law to see whether the law remains in place.