HARRISBURG - Gov. Rendell announced yesterday that he would freeze salaries for thousands of nonunion state workers and forgo his own raise while urging his top staff to do the same in a symbolic we-feel-your-pain gesture.
"We could not ask our employees to accept a wage freeze at the same time we would be accepting a COLA," Rendell said of the cost-of-living adjustment that takes effect next month.
The move is part of the $128 million cost-cutting package announced yesterday, the latest in a series of such efforts Rendell has made to stop Harrisburg from sinking deeper into a fiscal hole.
The news came hours after some legislative leaders announced that they would give back their 2.8-percent COLA raises, which took effect Monday. They also pressed rank-and-file members to join them.
About 13,600 nonunion state workers, most of them agency managers, were scheduled to receive 2.25 percent "longevity" pay increases next month. Rendell axed those increases indefinitely. Union workers are not covered by that move, although Rendell left open the possibility of renegotiating labor contracts.
Rendell's COLA payment begins in January and would raise his salary $4,800 to about $175,000. He said he would return to the treasury about $2,800 of that - the portion remaining after taxes and pension contributions are taken out.
He also called on 51 top officials, including cabinet members, to follow him.
"Obviously, that is not a great deal of money, but I think it is an important sum," he said of the overall wage freezes, which are expected to save the state about $14.3 million this fiscal year.
The cuts announced yesterday are on top of the $311 million in spending cuts Rendell has made to keep the $28.3 billion budget balanced.
Five months into the fiscal year, the state is $658 million behind revenue estimates. Rendell said he anticipated more shortfalls that could lead to a budget deficit of $1 billion to $2 billion next year.
Though the spending cuts were made across the board, the Department of Welfare is taking the biggest hit - a $150 million reduction - but no programs are being eliminated, Rendell said. Information about specific funding cuts was not released because the list had not yet been made final, he said.
"I am confident we haven't eviscerated the basic thrust of any of our programs," Rendell said.
Senate Republican leaders, who control the chamber, praised Rendell's move, but said they expected additional belt-tightening in coming months. "These cuts are another step forward in closing the budget deficit, but more work needs to be done," said Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi (R., Delaware).
Pileggi announced yesterday that he was drafting a bill to suspend legislative COLAs for one year.
In the interim, he and other Senate Republican leaders announced that they would give the money back to the state.
House Democratic leaders had announced late Tuesday that they would not accept the extra cash.
"In these tough times, government can and should set an example," said Rep. Keith McCall (D., Carbon), who is poised to take over as House speaker next month.
In 1995, lawmakers set in motion an annual cost-of-living adjustment for themselves and other state officials. Every year on Dec. 1, legislative salaries increase by the Consumer Price Index of the Philadelphia region during the previous year.
In the 13 years since, base salaries have bumped up 38 percent. For a brief period in 2005, the legislature replaced the COLAs with separate raises of 16 to 54 percent. But after widespread public outcry, it returned to the COLAs.
There was no clear indication yesterday what ranking House Republicans and Senate Democrats would do with their COLAs. Attempts to reach House Minority Leader Sam Smith (R., Jefferson) and Senate Minority Leader Bob Mellow (D., Lackawanna) were unsuccessful.
Two weeks ago, Mellow defended the COLAs as "a modest increase and the right thing to do."
However, several rank-and-file lawmakers sent news releases announcing that they would join with their leaders and not accept the COLAs.
Among them was freshman Rep. Steve Santarsiero (D., Bucks), who called the move "a good first step to what is sure to be an intense review of our state budget this year."
But Rep. Daryl Metcalfe (R., Butler) called the givebacks a "political sham." He noted that the COLAs, even if returned to the state, would in many cases still increase lawmakers' pensions.
"I am not going to fool the taxpayers by saying I am going to give it back. It's a façade," he said, adding that the only honest way of dealing with the problem was to repeal the COLAs by law.