More Like the Private Sector?

The Utah Advisory Commission to Optimize State Government presented their recommendations to Governor Herbert on August 19. Fraser Bullock, the Commission’s Vice Chair, presented a summary of the report to the Legislative Executive Appropriations Committee September 14, 2010.

The report highlights 56 recommendations that present reducing or eliminating waste and restructuring state government. Bullock noted that “the Commission recognized it is more difficult to optimize with $700 million already eliminated. How far and deep can you cut, when a lot has already been done effectively?” Therefore the Commission recommended the need to:
1. Restructure state government to drive continue efficiency improvement; and
2. Systematically change the mix between state employees’ salary and benefit to better reflect private sector practices.

Bullock suggested aligning incentives through a pay for performance plan in state government, similar to how the private sector uses pay to reward employees.

Senate President Michael Waddoups commented that State Government is not intended to run like a private business. Bullock responded, “while you don’t run state government for profit…the same principles of the private sector can be applied for effective service delivery. By finding savings through an efficient delivery of service, the state is able to use the excess money and apply it elsewhere.”

Sen. Daniel Liljenquist said state government already works like a business through its revenue sources. Liljenquist continued to say “the report is a good starting point for the Executive and Legislative Branches to come together and find ways to optimize our social objectives.”

In addition to restructuring state government, Bullock recommended “systematically changing the mix between state employee salary and benefits to better reflect the private sector.” The report stated that the average salary of state employees is 16.8% below private sector employees, while state employees’ average benefits are 19.5% greater.

Accurate compensation comparison data is required to better analyze the differences between the private and public sector. UPEA supports a more realistic compensation design that will enhance the state’s ability to attract and retain highly educated and trained employees.

UPEA has met with legislative leadership, Governor Herbert, and DHRM to garner support for UPEA’s proposed Compensation Commission. These policymakers will work with the Association in crafting appropriate legislation to make UPEA’s compensation proposals a reality.