Jani Revier, budget director for Gov. Butch Otter, told the Legislature’s joint CEC Committee, “We’re holding our own in relation to other employers. The governor hopes that you will join him in recommending another 3 percent CEC, so that we do not lose ground” as Idaho’s economy continues to boom.
CEC stands for change in employee compensation; it’s how the Legislature approves funding for raises for state workers. Otter’s recommendation, and the Legislature’s practice in recent years, are to approve a percentage increase in funding to cover merit raises; each agency then determines how much each worker would get, based on performance.
Revier also explained the governor’s proposal for a two-month “premium holiday” on state employee health insurance costs for next year, which will mean the state will spend less per employee next year. That’s solely because reserves have grown by more than is allowed, due to an error in a consultant’s calculations, she said. Costs are not going down; they’re still going up – just not as much as was anticipated. “Employees will still see an increase in their monthly premiums,” she said. “This is a savings in state appropriation, but it is not a savings in plan costs.”
Prior to her comments, Rep. Fred Wood, R-Burley, had criticized the “premium holiday” idea, saying he believed reserves should be built up instead. In response to questions from CEC Committee Co-Chair Neil Anderson, R-Blackfoot, Revier said the state could face a federal financial penalty of up to $10 million if it exceeds limits on allowable reserves.
Wood said he's concerned about maintaining adequate reserves as an interim legislative committee recommends going to bid on the state's employee health insurance plan next year, and possible moving to a self-funding model.