by Howard Stephenson
During the past two years the private sector strenuously fought to stay alive and the Legislature struggled to resolve $700 million in budget shortfalls. At the same time heads of seven departments of state government freely gave bonuses to half of their employees, according to Utah’s Legislative Auditor General. Not only were bonuses given out liberally, but they were granted for everyday work responsibilities.
During these difficult economic times it is extremely disturbing to discover that taxpayers’ money is being spent on the promotion of mediocrity in the government’s workforce.
The auditor determined that among the seven audited agencies over $2 million in cash incentives, or bonuses, were handed out to employees in 2001 and 2002. Therefore, knowing that seven agencies represent 20% of state government workforce by adding the remaining 80% your Taxpayers Association estimates bonuses of $5 million per year for a total of $10 million in bonuses over the two year period covered by the audit.
Incentives were not used to reward exceptional behavior but rather given to employees for simply doing their jobs. Reasons for receiving incentives included, filling a printer with paper and monitoring the fax and print-out documents basket, assisting with the summer party, faxing a letter for someone because they had to go to a meeting, and excellent work in preparing and helping serve lunch for an employee’s retirement. Your Taxpayers Association believes that this liberal use of incentives not only wastes taxpayer money but reinforces mediocre behavior.
Ironically, the worst abuse occurred in the Department of Human Resource Management (DHRM), which is charged with a leadership role in developing rules governing the appropriate and proper use of incentive awards for state employees. In fact, DHRM granted “token” cash awards of $230 the past two years to every one of its 44 employees. In addition to granting 100% of their employees cash incentives, DHRM granted the largest individual incentive which was between $7,001 – $8,000 and had the highest bonus averages of $977 in 2001 and $1,152 in 2002. Altogether, DHRM gave out two-year bonuses totalling nearly $100,000.
DHRM’s executive director Karen Suzuki-Okabe announced her resignation one day before she submitted a formal response to the auditors regarding her office giving the performance bonuses to all employees. In her response she pointed out that the state’s average salaries are 17% below comparable jobs in the market while the state’s benefit package is 4% greater than the markets. She later told reporters that the investigation “may be interpreted as anti-public-employee. That coupled with two years of no merit or cost-of-living pay increases will make it more difficult for everyone,” she said.
However, it should be pointed out that the “market” surveys used by DHRM include almost entirely large employers and government agencies which typically pay better than small employers. Small businesses, which comprise the bulk of jobs in Utah, are systematically excluded from the salary and benefit surveys.
Another factor which should be used in evaluating whether taxpayers need to step up and pay state workers more is job turnover. According to DHRM figures, state turnover typically hovers around 10% per year. In recent years turnover peaked at 11.64% in 2000 and has dropped each year until the latest figure for 2002, which shows turnover at the lowest level in several years: 9.76%.
The complete audit can be found on the web at the following link: http://www.le.state.ut.us/audit/ilr2003_c.pdf
Utah Tax Commission Complaints Investigated
The Utah Legislative Auditor General’s office also investigated a group of citizens’ complaints about the Utah Tax Commission’s supposed adversarial treatment of appeals, inadequate system of notifications and a number of other grievances. The auditor determined that the Commission does provide sufficient notification of delinquent taxes and is not adversarial to tax appeals stating, “They (the group of citizens) lacked credibility because they misinterpreted laws, cited nonsensical arguments and appeared to be challenging taxes outright.” The citizens claimed that they are not subject to the taxes of the United States government because they live independent as a soverign nation unto themselves. Others disputed their identities because the Tax Commission printed their names in all capital letters.
The complete audit can be found on the web at the following link: http://www.le.state.ut.us/audit/03_04rpt.pdf