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P.O. Box 7129
Boise, ID 83707
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Board chairman discusses potential plan
for addressing employee compensation

Message delivered to special legislative committee

Idaho has reached many important crossroads in growth, transportation and economic recovery.

Over the past few months I have reported to you about efforts to address employee compensation. Your concerns are being heard and many people are working hard to arrive at a solution.

Representing the Transportation Board, the Executive Team and each of you, Chairman Charles L. Winder presented those concerns to the state employee compensation interim legislative committee Aug. 29. He outlined the need for compensation change – in funding and administration – and presented a potential plan as a positive approach for addressing compensation. His approach was honest and straight forward, affirming that we recognize the challenge and understand the plight of our employees.

  • We must maintain a high level of service and project delivery without growing the department or raising taxes.
  • We must maintain a high quality workforce.
  • Inflation, higher medical insurance costs and minimal raises have eroded employee salaries.
  • Only a 2 percent funding increase has been provided through legislative action for state employee compensation. During the same time period, inflation has increased by more than 9 percent.
  • Idaho state employees would need as much as a 16.6 percent compensation adjustment, on average, to be competitive within the market place.
  • ITD employees are falling even farther behind the market adjustment rates in the following categories: 17.1 percent for labor and crafts, 28.5 percent for engineers, and 25 percent in information technology
  • 59 percent of ITD’s employees are below the Division of Human Resources (DHR) “policy point” for pay
  • 94 percent are below the “true” market rate
  • It takes ITD employees an average of 19 years to reach the DHR “policy point.”
  • New employees are paid an average of 13 percent above entry level wages, which causes salary compression issues for long-time employees whose salaries have not kept pace with the market rate.
  • ITD is seeing an increasing loss of employees to local governments and to the private sector.
  • The transportation department lost 646 employees between 2000 and 2004 – collectively more than one-third of our employees.

Over the next five years we will manage a 30-percent increase in federal funds, a two-fold increase in public transportation funding and a $1.2 billion investment in the transportation system through Connecting Idaho.

Chairman Winder presented a positive plan to allow the ITD Board and Executive Team the flexibility to manage our resources and to make decisions about employee compensation that aren’t limited by Idaho code. Specifically, he suggested ITD needs:

  • The flexibility and freedom to move funds within ITD’s appropriation to allow more dollars to be put into personnel.
  • The ability to recruit and hire employees independent of the Idaho Division of Human Resources (DHR).
  • The authority to use $15 million (approximately 2.9 percent of our FY07 budget) to retain and recruit qualified and experienced employees, with a strong emphasis on retention. At this level, ITD still would pay lower than market rate.
  • Authority for the transportation board and ITD Executive Team to compensate critical job classifications as demands dictate.

We believe those measures will enable us to implement employee compensation change that is sorely needed and long overdue.

The ITD Board and the Executive Team, along with the legislature and governor, continue to pursue increased compensation for state employees and the increased flexibility for departments to manage their workforce.

We will continue to update you as we approach the 2006 legislative session.