2004
RESULTS
2004 Compensation Report for Mid-Atlantic Governments
JANUARY 2005
prepared by
Eric Jacobson and Sarah McCloskey
Institute for Public Administration
College of Human Services, Education & Public Policy
University of Delaware
www.ipa.udel.edu
Background
The purpose of this report is to share the results from the Institute for Public
Administration’s 2004 Governmental Compensation Survey. For nearly 20 years, the Institute
for Public Administration (IPA)1 has conducted this salary survey for numerous state and local
governments in the Mid-Atlantic region. This study identifies trends in salary and compensation
practices among government employers in the region. The salary administration section (Part 1
of the survey) includes questions about general salary adjustments and tactics used to reduce
compensation spending. The second section (Part 2) of the compensation survey gathered
detailed data about salary levels for 81 state and 41 local benchmark positions included in the
survey. The benchmark positions are the same ones included in the 2003 and 2002 surveys – a
few minor changes were made in position titles and position descriptions.
Methodology
To conduct the 2004 study, the IPA sent electronic links to this year’s survey via email to
22 state and local governments and the University of Delaware. Respondents received the links
on October 1, 2004, and were asked to complete and return the survey by October 26, 2004. A
total of eight states and thirteen local governments in the Mid-Atlantic region completed the
survey. We have included the University of Delaware in the group of local governments for
calculations and summaries. For a complete list of the 2004 survey participants see Table 1 at
the end of this document.
Part 1 Results: Salary Administration
1
The IPA is a research organization within the College of Human Services, Education & Public Policy at the
University of Delaware (www.ipa.udel.edu).
2
The salary administration section of the compensation survey contains two main themes.
The first focuses on salary increases. Participants were asked to identify general or cost of living
(COLA) salary increases that were granted or planned for employees since July 1, 2003. Next,
participants identified any yearly increases that were either granted or approved for the future
(2004 - 2006). If an increase was granted, respondents identified the type of increase (general,
negotiated, merit, or COLA), date granted, and the average percent or flat dollar amount of the
increase. In addition, if an increase was granted, employers identified whether or not their
organization adjusted their formal pay ranges (minimum, midpoint, and maximum rate) to reflect
the salary increase. Finally, employers identified any type of alternative bonus granted to
employees in lieu of a pay increase.
The results from this part of the salary administration section identified eighteen
governments (six state and twelve local) that granted increases during the last survey year
(10/2/03 – 10/1/04). For these eighteen respondents, the mean increase equaled 3.0%, and the
median increase also equaled 3.0%. The local governments reported a mean increase of 3.4%
and a median increase of 3.1%. Of particular importance, state governments on average granted
smaller increases, with mean and median increases of 2.2% and 2.5%, respectively. Two
responding governments, not included in the above mean and median calculations, granted flat
dollar increases (e.g., $750 per employee) instead of percentage increases.
For comparative purposes, the U.S. Bureau of Labor Statistics calculates the Employment
Cost Index for state and local governments. The BLS’ National Compensation Survey (NCS)
contains, “Comprehensive measures of occupational earnings; compensation costs trends, benefit
incidence, and detailed plan provisions.” The most recent versions of survey results can be
found on the BLS website.2 Also located on this website is information about the Employment
2
U.S. Department of Labor’s Bureau of Labor Statistics: www.bls.gov/ncs/home.htm
3
Cost Index and employer costs for employee compensation. Employers can use this reference to
compare their compensation practices with national trends. For the twelve months ending Sept
2004, the ECI increased 2.0% nationally. And for the twelve months ending Sept 2003, the ECI
increased 2.3%.
Part 2 Results: Salary Levels
Results from Part 2 of the compensation survey are divided into three tables, each
consisting of an eight-column worksheet. Each table, described below, is presented as a separate
document on this Web site. The data reported applies to the base salary of full-time (30 hours or
more per week) employees. Column one in each table is the position title. A list of position title
descriptions can be found in the State and Local Position Description Booklets. In Table 2,
Combined State and Local Averages, the second column, found only in Table 2, is titled Number
of Respondents. This number represents the total number of participants that provided any
useable information for a particular position.
The next column in all three tables, Actual Average Salary, represents the average
amount paid for that position among all the reporting respondents. The next two columns,
Actual Minimum and Actual Maximum, are the averages of minimum and maximum amounts
being paid by employers for that position. Following these columns are Formal Minimum and
Formal Maximum, which are based on employers with a formal pay plan. These are the average
values for the minimum and maximum salaries that are stated “on the books” in accordance with
a formal pay plan. The last two columns are entitled Actual/Formal Minimum and
Actual/Formal Maximum. If employers did not report formal minimum and maximum salaries,
4
their actual values are used instead to calculate the averages. This measure has the benefit of
allowing us to include a greater number of responses in our calculations.
Finally, in the Final State Averages and Final Local Averages tables (available as
separate PDF files on this Web site) the bottom number in each cell (under the salary) is the
number of responses used to calculate that average. In some cases, as noted in the tables, there
was insufficient data to report or there was no data available at all. These two tables along with a
table presenting state-local combined results (Tables 2, 3, and 4) are available as separate PDF
documents in this Web site.
Discussion
A recession in 2001 sharply reduced government revenues. After coping for three years
with the weak national economy and fiscal crises in state and local governments, the economy
appears to be turning around.
Now, many governments are finding that tax collections are more
stable - but budgets are still feeling the pressure of the growth of Medicaid and other health
costs.
Nevertheless, this recovery could be good news for government employees who suffered
pay cuts, layoffs, and benefit cuts during recent years. According to a recent New York Times
article, “the light at the end of the tunnel is beginning to appear, but unfortunately it's a long
tunnel."3 The article, based on a December 2004 National Governors Association study, reports
that the 50 states ended the 2004 fiscal year with balances totaling $25.3 billion, equal to 4.8
percent of state spending. That represents a significant increase from the previous year, when
balances totaled $16.4 billion, or 3.2 percent of state spending.
3
Pear, Robert. “States' Pocketbooks Are Fuller, but Health Costs Stall Recovery.” New York Times, 12/17/04.
5
However, despite signs of recovery in the economy, employees may still have to cope
with minimal raises and increasing insurance expenses. As spending for health insurance
increases and continues to strain state and local governments, employers are shifting a large
share of the burden to their employees. A recent New York Times article claims, “State budgets
will continue to be stressed by slow job growth and rapidly rising health care costs.”4 These
rising costs may continue to create tight budget constraints, creating pressure for managers to cut
compensation spending. Also, with the U.S. unemployment rate over 5%, employers have few
incentives to raise compensation rates to attract new workers. Recent salary surveys and
projections by Economy.com and Hewitt Associates, a human-resources consulting firm,
suggest that employers across the U.S. will grant raises close to the current rate of inflation,
which is running at about 3.4% annually. That comes on top of similar pay raises in 2004.5
The findings of our Delaware survey indicate that in Delaware and the Mid Atlantic
region, state and local government compensation spending is more restricted than these national
trends suggest, particularly for state governments. Two factors help explain why state raises fall
short of those granted by local governments. First, state government revenues tend to be more
sensitive to economic fluctuations. When the economy is weak, incomes decrease, thus reducing
government tax revenues. Second, when the economy is weak, there are more demands placed
on state social service agencies. State budgets, therefore, are more affected than local
governments’ as a result of near double-digit health care cost inflation and rising social service
demands.
4
5
Broder, John. “Despite Rebound, States’ Budgets are Still Reeling.” New York Times. 1/5/04.
Opdyke, Jeff. “Getting a Bonus instead of a Raise,” Wall Street Journal, 12/29/04.
6
Data Tables:
Table 1:
State Governments:
Delaware
Maryland
Massachusetts
New Jersey
New York
North Carolina
Pennsylvania
Virginia
Local Governments:
City of Dover, Del.
City of Newark, Del.
City of Wilmington, Del.
Kent County, Del.
New Castle County, Del.
Sussex County, Del.
University of Delaware, Del.
Cecil County, Md.
Kent County, Md.
City of Camden, N.J.
Mercer County, N.J.
Chester County, Pa.
Delaware County, Pa.
Table 2: Combined State and Local Averages
Table 3: Final State Averages
Table 4: Final Local Averages
7
Institute for Public Administration
College of Human Services, Education & Public Policy
University of Delaware
180 Graham Hall
Newark, DE 19716-7380
phone: 302-831-8971 e-mail: ipa@udel.edu
fax: 302-831-3488
www.ipa.udel.edu
The Institute for Public Administration (IPA) is a public service, education and research center that links the resource
capacities of the University of Delaware with the complex public policy and management needs of governments and
related nonprofit and private organizations. IPA provides direct staff assistance, research, policy analysis, training,
and forums while contributing to the scholarly body of knowledge. Program areas include civic education, conflict
resolution, healthcare policy, land use planning, organizational development, school leadership, state and local
management, water resources planning, and women’s leadership. IPA supports and enhances the educational
experiences of students through the effective integration of applied research, professional development opportunities,
and internships. Jerome Lewis is the director of the Institute and can be reached at 302-831-8971.
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