2005
RESULTS
2005 Compensation Report for Mid-Atlantic Governments
JANUARY 2006
prepared by
Eric Jacobson
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 2005 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 compensation survey’s salary
administration section (Part 1) includes questions about general salary adjustments. The second
section (Part 2) gathers detailed data about salary levels for 81 state and 41 local benchmark
positions included in the survey. The benchmark positions largely are the same ones included in
the 2002–2004 surveys; one new position, “psychologist,” was substituted for “child
psychologist.” No other changes were made in position titles or position descriptions.
Methodology
To conduct the 2005 study, IPA sent electronic links to this year’s survey via email to 21
state and local governments (including the University of Delaware). Respondents received the
links in September and were asked to complete and return the survey by October 27, 2005.
Survey data was obtained from all 21 organizations, which included eight states and 13 local
governments in the Mid-Atlantic region. The University of Delaware is grouped with local
governments for the purpose of summary calculations and reports of results. For a complete list
of the 2005 survey participants, see Table 1 at the end of this document.
1
IPA is a research organization within the College of Human Services, Education & Public Policy at the University
of Delaware (www.ipa.udel.edu).
2
Part 1 Results: Salary Administration
The salary administration section of the compensation survey focuses on general or cost
of living (COLA) increases. The first set of questions asks for detailed information about
increases that were granted or planned for employees since July 1, 2004. The second set of
questions asks participants to provide information about any increases that have been approved
or proposed for future years (2005–2007). If an increase was granted/approved/proposed,
respondents are asked to identify 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 indicate whether or not their organizations adjusted their formal pay
ranges (minimum, midpoint, and maximum rates) to reflect the salary increases. This section
also includes a question about bonuses granted to employees in lieu of salary increases. Such
increases might include one-time bonuses or additional vacation time.
The results from the salary administration section of the survey identify sixteen
governments (eight state and eight local) that granted general or COLA increases during the last
survey year (10/2/04–10/1/05). For these 16 respondents, the mean increase equaled 3.1%, and
the median increase equaled 3.0%. Local governments granted larger increases than state
governments by nearly a full percentage point. The local governments reported mean and
median increases both equal to 3.5%. The eight state governments granted mean and median
increases of 2.6% and 2.8%, respectively. These mean and median measures exclude: (a) one
local government that did not grant an increase and (b) four governments that made substantial
revisions to their pay plans, which resulted in substantial, but not across-the-board, pay
increases.
For comparative purposes, the U.S. Bureau of Labor Statistics calculates the Employment
Cost Index (ECI) for state and local governments. The BLS’ National Compensation Survey
3
(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 Cost Index and employer costs for employee compensation. Employers can use
this benchmark to compare their compensation practices with national trends. For the twelve
months ending in September 2005, the ECI increased 2.7% nationally. And for the twelve
months ending in September 2004, the ECI increased 2.0%.
Part 2 Results: Salary Levels
Results from Part 2 of the compensation survey present detailed summary measures for
all surveyed positions. The summary measures reported apply to the base salary of full-time (30
hours or more per week) employees. The results are divided into three eight-column tables. The
tables are available as PDF files on this website and can be accessed by clicking on the links
below.
Table 2 – Combined State and Local Averages
Table 3 – Final State Averages
Table 4 – Final Local Averages
Column one in each table gives the position titles. A list of position title descriptions can be
found in the State and Local Position Description Booklets available on this website. In Table 2
– Combined State and Local Averages, the second column, which is found only in this table, is
titled Number of Respondents. It represents the total number of survey participants that
provided any useable information for a particular position.
2
U.S. Department of Labor’s Bureau of Labor Statistics: www.bls.gov/ncs/home.htm
4
The next column in all three tables, Actual Average Salary, represents the average
amount paid for that position among all the reporting respondents. Following this are columns
giving the Actual Minimum and Actual Maximum, which are the averages of minimum and
maximum amounts being paid by employers for a particular position. The next columns, Formal
Minimum and Formal Maximum, are based on data only for employers with formal pay ranges
for a position. 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. Data for Actual/Formal generally equals the formal values. If an employer did not
report formal salary levels, the actual values are used instead to calculate the Actual/Formal
salaries. This measure has the benefit of allowing the inclusion of a greater number of responses.
Finally, in Table 3 – Final State Averages and Table 4 – Final Local Averages (again,
available as separate PDF files on this Web site) the bottom number in each cell (immediately
under the salary) indicates the number of responses used to calculate that average. In some
cases, as noted with triple asterisks in the tables, there was insufficient data to report or there was
no data available at all.
Discussion
A recession in 2001 sharply reduced government revenues. After coping with the 2001
recession and shrinking revenues, government budgets have benefited from several years of solid
economic expansion. National economic growth has averaged an annualized 4.1% for more than
two years. State revenues improved markedly in 2005. The National Association of State
Budget Officers (NASBO) reports that in fiscal 2005, revenues exceeded projections in 45 states
5
and were 4.2% higher than originally estimated.3 Moreover, NASBO’s analysis found that state
general fund revenue grew by 6.5% in fiscal 2005.
As a result, governments were able to begin to restore funding to programs they were
forced to cut during the downturn, increase employee salaries, and meet the pent-up demand for
structural changes in pay plans.
The economic recovery seems to be good news for the Mid-Atlantic governments
included in our survey panel. All but one of the 21 governments surveyed for our Delaware
study granted across-the-board or structural salary increases in the last survey year.
General/COLA increases granted to state and local government employees averaged 2.75% and
3.5%, respectively, for the survey year ending October 1, 2005. These values compare favorably
to the 2.5% and 3.1% increases that we reported for the previous survey year.
Looking forward to 2006, state and local government employees likely will receive only
modest salary increases. Due to a number of factors—including rapidly rising Medicaid and
health insurance costs, demographic shifts, aging infrastructure, and the possibility of job losses
and lower rates of economic growth—state and local government officials probably will exercise
caution in creating new, long-run spending and compensation commitments.
This theme was the subject of a 2004 New York Times article that stated, “State budgets
will continue to be stressed by slow job growth and rapidly rising health care costs.”4 These
rising costs (along with new funding rules for retiree health care costs) may pressure
governments to slow the growth of compensation spending. Two macroeconomic trends also
point to modest salary increases. First, with the U.S. unemployment rate of 5%, employers have
few incentives to raise compensation rates to attract new workers. Second, economists expect
3
National Association of State Budget Officers and National Governors Association, “The Fiscal Survey of States:
December 2005.”
6
overall inflation to moderate this year. Recent salary surveys and analysis by Economy.com and
human-resource consulting firm Hewitt Associates indicate that employers across the United
States grant raises close to the current rate of inflation.5 The consumer price index (CPI) rose
3.5% in the 12 months ended in November. But the Wall Street Journal’s consensus forecast6
calls for the CPI to rise 3.1% in the 12 months through May 2006 and then drop to 2.3% in the
12 months through November 2006.
4
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
Gerna-Morales, Rafael and Annett, Tim. “Economic Forecasting Survey: Uptick in Business Spending Is
Expected to Cushion Blow to Economy, Forecasters Say,” Wall Street Journal, 1/3/06.
5
7
Data Tables:
Table 1:
State Governments
Delaware
Maryland
Massachusetts
New Jersey
New York
North Carolina
Pennsylvania
Virginia
Local Governments
City of Dover (Delaware)
City of Newark (Delaware)
City of Wilmington (Delaware)
Kent County (Delaware)
New Castle County (Delaware)
Sussex County (Delaware)
University of Delaware (Delaware)
Salisbury (Maryland)
Cecil County (Maryland)
Kent County (Maryland)
Mercer County (New Jersey)
Chester County (Pennsylvania)
Delaware County (Pennsylvania)
Table 2 – Combined State and Local Averages
Table 3 – Final State Averages
Table 4 – Final Local Averages
8
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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