HR/benefits professionals in the public sector acknowledge that big deficits in state and local budgets have led to scaling back on health care benefits, reports the Center for State and Local Government Excellence.
The center conducted an online survey of hiring managers and directors, which showed that nearly half of respondents reported that their governments revamped health care benefits due to budget constraints.
Balancing state and local budgets has meant that municipalities increased employee contributions to health plans (69%); reduced some benefits available in the plans (23%); and decreased employer contributions to those plans (10%).
Still, state and local governments continue to bridge the gap between their revenues and expenditures by turning to hiring freezes, pay freezes and furloughs. Yet according to the survey, 39% of respondents noted that the furloughs failed to produce the savings that had been anticipated.
“Local and state governments face fiscal constraints for at least two more years, but they also face major talent challenges,” says Elizabeth K. Kellar, president and CEO, Center for State and Local Government Excellence. “They must tighten their belts while keeping an eye on their aging workforce. Making sure they have the right people in place to provide critical services is just as important as balancing the budget,” she adds.
Members from the International Public Management Association for Human Resources and the National Association of State Personnel Executives completed the online survey. Of the 396 members who completed the survey, 78% work for local government; 14% for state government; 3% for federal government; and 5.4% for a non-government sector.
Other findings from the survey, which was conducted in November and December 2009, include:
- Among the 21% whose governments have changed their retirement plans, 73% say the changes have not affected current workers and 60% say the changes have not affected new hires.
- Nearly 46% of the survey’s respondents report that retirement-eligible employees are postponing their retirements.
