POCATELLO – Idaho is facing a crisis.

Pam Landon faces it, too.

As business operations manager for the transportation department's District 25 office, she helps keep maintenance crews staffed, but that task is becoming more difficult.

"In our Blackfoot maintenance shed alone, we have three openings. We've had one of them open for about six months," Landon said.

After turning down the job, would-be applicants tell her the same thing.

"They say they can't make ends meet on that salary. The pay is too low," she said.

Hiring isn't Landon's only dilemma. Keeping the department's employees on the payroll is also a challenge.

"For the last two years, we haven't been able to give any raises," she said. "There's been no bonuses, no raises, no nothing."

Landon said the pay increases have not been possible because the funds are not there.

The staffing emergency isn't limited to the Idaho Department of Transportation, however. It's an issue affecting virtually all state agencies and employees.

A lack of funds, the result of an ongoing recession, has forced Idaho lawmakers to hold the line on salaries and wages for state employees. The matter of how to compensate those workers is expected to come to a head during the 2004 legislative session, which began Monday.

"We've got to do something for state employees this year," said Sen. Bert Marley, D-McCammon. "Even if we budgeted a raise, it wouldn't go into effect until after this fiscal year. That means (state employees) will have gone without a raise for three consecutive years."

To make matters worse, rising health care costs are taking a bigger bite of the same pie. Landon said insurance premiums for transportation department employees rise 15-18 percent each year.

Because of growing insurance costs, state employees are "getting less money now than they got three years ago," said House Speaker Bruce Newcomb, R-Burley.To alleviate that burden, some legislators propose a "cost of living" increase for all state employees. Some favor a 2 to 3 percent raise, while others believe a 1 percent increase is more practical.

State officials estimate each percentage point would cost Idaho taxpayers some $5 million.

"We can't do what's adequate, but anything under 2 or 3 percent would be a travesty," Marley said. "I suspect there may be a move for 1 percent, but after three years, I don't think that's enough, given the cost of insurance, inflation and other expenses."
Nevertheless, Senate Majority Leader Bart Davis, R-Idaho Falls, said he expects a modest pay hike.

"That's my honest, genuine belief," he said.

But Davis said an increase would not effect public school teachers and administrators because they are funded with a different formula and have already received some level of compensation.

Regardless, a 1 percent increase for other state employees wouldn't be enough, said an expert with the Idaho Division of Human Resources, the division of the governor's office responsible for researching the compensation issue.

"If you gave everyone a 1 percent increase, the people on the lowest end of the pay scale would hardly see anything," said Ann Heilman, the division's director. "If you're making $7-$8 an hour, and you get a 1 percent increase, you're really not going to see anything. It would vanish."

Lawmakers say budgeting an additional $5 to $15 million for state employees won't be easy. For some, cutting budgets is not an option.

"We've done so much of that the last few years, there's not a place where I'd be comfortable going in and cutting anymore," he said.

To make a 3 percent raise more plausible, Marley said a surplus, brought about by surging sales tax revenues and $80 million in one-time federal and Medicaid grants, could be applied.

"Are we going to keep all this money in surplus?" he said. "There's the potential in having $70 to $80 million carryover. We ought to spend $15 million of that in giving our employees a well-deserved increase."

Other legislators aren't so keen on the idea.

Rep. Dennis Lake, R-Blackfoot, is one of them.

"Ongoing expenses need to be covered by ongoing revenues," he said. "It would be very dangerous ground if you funded ongoing expenses with one-time revenues."

Even if a 2 or 3 percent increase were granted, Heilman said salaries and wages for state employees would still lag behind their market averages.

"If (Idaho) wanted to pay the average market rate, it would have to figure out how to come up with 14.6 percent. That's the absolutely guts of the whole issue," she said.

Rather than across-the-board pay increases, Heilman favors performance-based raises, which would be left to the discretion of agency administrators, managers and supervisors.

Once funded, bosses would award increases to their employees based on merit.

Heilman explained not all agencies and professions will require the same level of attention.

Some agencies, she said, have been able to award raises because they receive monies, such as dedicated taxes or federal grants, from outside Idaho's general fund.

Heilman added state accountants receive competitive pay, while state nurses are "dramatically underfunded."

"Raising accountants (salaries) 14 percent would overfund them and pay them far exceeding the market," she said. "On the other hand, if you paid our nurses 14 percent more, it wouldn't be nearly enough to get them to the market rate."

Heilman recently expressed these concerns before a joint legislative committee, but many lawmakers are eagerly awaiting Gov. Dirk Kempthorne's State of the State and State of the Budget addresses, which will be given Monday evening.

"Employee compensation really comes down to the governor," said Sen. Edgar Malepeai, D-Pocatello. "Without leadership from the governor, the state really can't do a whole lot."

"The governor is very aware of the sacrifices our state employees have made," said Mike Journee, the governor's press secretary. "They've been doing a great job and they've been doing more with less."

And although it's hard to predict how any sort of pay raise will effect state employees, Landon can forecast how things will go if something isn't done soon.

"If things don't change, I expect to have a higher turnover," she said, a viewpoint shared by Malepeai.

"If we are serious about holding on to the quality of people and the quality of service we are accustomed to at the state level, then we are going to have to do something about their pay," he said.

Senate President Pro Tem Bob Geddes said Idaho will have to gradually dig itself out of the pay crisis.

"We've fallen behind," he said. "We hate to lose valued employees, so we have to keep pace, but we aren't going to be able to make up that gap immediately."