Governor wants rework of state employee classification; won’t support $80 million pay increase

Gov. Sarah Sanders said Wednesday (March 15) she would not support an $80 million proposal to increase pay for state employees. According to an agency spokesperson, there are 22,913 executive branch state employees in Arkansas.

In a letter to Joseph Wood, Sanders’ Department of Transformation and Shared Services Secretary, she indicated her objection to the plan and called on him to initiate a review of the state employee compensation and classification system.

“As Governor, I have been clear that my goal is to look for ways to boldly reform state government to be more responsive and responsible to the taxpayers of our great state. One of the largest costs for any department within my administration is personnel. There are many good and hard-working Arkansans that are employed by the state to perform essential services and help their fellow citizens. These public servants should be compensated and rewarded through a system based on merit and accomplishment, not solely on years of service,” she said.

“Therefore, I will not support a broad-based pay plan increase in the classification and compensation bill. The hardworking taxpayers of Arkansas should not be saddled with the $80 million price tag from such a proposal that doesn’t consider the strategic needs that exist in education, public safety, health care, and corrections,” Sanders added.

She directed Wood to “review and rework” the existing classification and compensation structure of the state, saying the state’s employees per capita are higher than surrounding states.

“It’s long-past time to reduce the size and scope of government, identify efficiencies, and responsibly phase out the income tax. Through my executive order in January, I am directing my departments to lower overall staffing levels, but I want to empower my departments to be innovative in restructuring and changing the system from within. My end goal is to be responsible to Arkansans by ensuring their dollars are being used efficiently and effectively, and that citizens are receiving the level of service and attention needed from these departments,” she said.

Sanders called for a report to outline changes by the end of the year.

“I will then determine the next steps to work with the General Assembly to make an impactful change on our personnel system,” she said.

John Bridges, executive director of the Arkansas State Employees Association, offered this response to Talk Business & Politics:

“We are very discouraged to learn that Governor Sanders has declined to implement the reevaluation of the state employees’ pay plan, which is estimated to cost $41 million. It has been seven years since the last time the salary ranges for state employees have been adjusted and our members have been anxiously awaiting the announced revised pay plan, which was developed after a comprehensive study by the Office of Personnel Management.

“In the last seven years, state employees have worked hard through all of the difficulties of the pandemic while at the same time inflation has run rampant and the size of the workforce shrunk by almost 10%. We hear from agency managers that the failure to update the pay plan has made it difficult to recruit and retain talented employees, especially when the pay is already much lower than private business.

“We look forward to working with Governor Sanders to find solutions that will fit with her strategic priorities while recognizing the hard work of 23,000 state employees all over the state.”