FOR IMMEDIATE RELEASE
January 25, 2007
Contact:
David Atkinson
717-787-6535
 

Armstrong: State Contract Costs Compound State Spending Problems

The substantial added costs wrapped up in the new contract for state employees conflict with the demands of taxpayers for state spending control, according to Senate Appropriations Chairman Gib Armstrong.

"Pennsylvania taxpayers are going to be upset as they learn about the total cost of this package and the impact it is going to have on a state budget that is, in the view of many, already too spending-heavy," Armstrong said.

"The reported contract cost of more than $2 billion over the four years is a big number.  That translates into a 22.5% increase.  If these were economically robust times throughout Pennsylvania, and the state was flush with revenue, perhaps there might be less concern.  But this is one more indication to people that state government continues heading in the wrong direction on spending matters," he pointed out.

"Every branch of state government needs to pay attention to the message delivered in the last election.  When voters insisted on reform, they were not expecting $1250 across-the-board signing bonuses for state employees.  And the voters made it abundantly clear that they do not like to see pay hikes granted on top of cost-of-living increases, as will be the case here.  That kind of hidden cost has proved particularly objectionable to the public," Armstrong stated.

"We are already staring at a $2 billion gap between anticipated revenues and what state government is looking to spend, and this adds another layer of spending on top of the problem.  The budget situation is getting worse before the Governor even delivers his budget address," he warned.

"I am not in any way diminishing the value of the many talented people in the state workforce or the importance of effective state services to the lives of many Pennsylvanians.  And I realize that any Administration prefers to reach a settlement before there is a threat of a strike or a disruption of services.  There are some positive things in the contract, such as the increased contribution for health care, but that falls short of compensating for the overall cost.  The hard reality is that this contract is too generous for these economic times, and it is contrary to what taxpayers think we should be doing," Armstrong concluded.