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Governor Thanks Employees by Awarding Pay Dividend

Press Release

Location: Indianapolis, IN

Governor Mitch Daniels today rewarded state employees for their efforts to contribute to the state's solid financial position. Following Thursday's report by state Auditor Tim Berry that the state closed the year with $1.18 billion in reserves, the governor said employees will receive a one-time pay dividend.

"As we close the fiscal year, your commitment to protecting Hoosier taxpayers while continuing to provide excellent customer service is evident and deserving of recognition under our pay for performance model," Daniels wrote in a letter distributed to state employees.

He went on to say that "No state anywhere comes close to Indiana's record of spending tax dollars carefully, with total savings over the last six years in the billions. Your spending efficiency has enabled us to stay in the black even as revenues plummeted."

Eligible employees will receive $500 (meets expectations), $750 (exceeds expectations) or $1,000 (outstanding) based on their 2010 job performances. Approximately 24,000 executive branch employees are eligible. The amounts will be added to paychecks at the end of this month or early August.

More about the state's fiscal accomplishments:

Spending Discipline

· From 2005-2011, state expenditures have grown by only 1.43 percent annually. This compares to 5.88 percent from 1996-2004

· Adjusted for inflation and population growth, state expenditures have declined by 1.8 percent per year (compound annual rate) from 2004 until 2011

· In Fiscal Year 2011, state agencies provided more than two-thirds of the spending reductions even though their budgets total just one-third of general fund appropriations

· In Fiscal Year 2011, state agencies reverted approximately $330 million from their operating budgets, $140 million more than was projected

o These reversions are on top of 10 percent agency appropriation reductions from the FY 2008-2009 budget and the FY2010-2011 budget

o Most agency budgets were reduced by an additional 15 percent (on top of the prior 10 percent reduction) in the FY 2012-2013 budget to reflect this reduced spending level

· Since FY 2009, state agencies have reverted more than $1.5 billion to the state's general fund

· Reductions in state agency spending have enabled K-12 spending to reach an all-time high of 55.4 percent of the total FY 2010 budget, the highest in the nation

State Employees

· The total number of full-time state employees is 28,069 (less than 1976)

· Since 2008, the number of state employees has declined by 3,747 (11.8 percent) almost entirely through attrition

o This reduction in state headcount has generated savings in excess of $155 million annually

· State employees went 3 years without raises before the pay-for-performance increase granted in early 2011

· We have worked hard to build a culture of economy and efficiency, and the contributions by state employees in recent years demonstrate they have embraced this culture

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