Marta mossburg: Sick days cause chronic budget illness
By: Marta Mossburg
Examiner Columnist
July 31, 2009
Serving the people of Maryland must really damage the immune system of state workers.
They are absent on average 2.3 weeks a year from illness, according to statistics from the state Department of Budget and Management.
Some agencies foster a particularly unhealthy environment. Employees of the Department of Natural Resources were absent due to sickness an average of more than 140 hours per year or 3.5 weeks in 2007. Combined with their other leave time and holidays, DNR employees are off an average 11 weeks per year, all paid.
Employees at the Department of Health and Mental Hygiene were not very healthy, either. They averaged 102 hours off in 2007 due to sickness, or 2.6 weeks. And those working for the Department of Human Resources were out 2.5 weeks per year.
These unplanned absences are costing taxpayers millions each year and the time off far exceeds days taken in the private sector for illness. It begs the question of why Gov. Martin O'Malley, amidst a budget crisis, does not seek to change a sick policy that allows state workers to accumulate 15 days per year, roll unused days to the next year indefinitely with no penalty and encourages lying.
Those in the private sector enjoy no such benefit. A study released in October 2008 by consulting firm Mercer for Kronos Inc. showed that private sector workers averaged 5.3 days off per year for sickness.
Mercer estimated that the full cost of all absence equals about 36 percent of payroll, with unplanned absences over 9 percent of the total. The survey focused on companies with over 5,000 employees eligible for benefits, so the impact on small businesses is likely much higher.
State figures paint a different picture. DBM estimates that absence equals about 15 percent of payroll, with unplanned absences making up 13 percent of that total. Since state employees take twice as much sick time as DBM estimates, unplanned absences are costing taxpayers a minimum of $1,828 per person, instead of the $914 the state calculates.
But the study shows the state could be underestimating how much taxpayers are losing from all forms of absence. If the Mercer findings were applied to the state, it would mean that taxpayers are spending $21,352 per employee on all absence, not the $6,942 DBM estimates.
Combined with other benefits, including health care and pension payments, it means state employees receive $38,647 each year in benefits alone, for a total average compensation package worth $86,097. Remember, the average private sector worker in Maryland makes less than the average state worker on wages alone, so benefits push the public employees even further ahead.
That's great news for individuals receiving those benefits, but it means taxpayers are actually spending $640 million more than they think they are for employee benefits. Cutting that from the budget would close the budget gap this year and permanently lower state operating costs - an urgent need considering the underlying $2 billion gap between revenues and spending.
Cutting sick days to five per year and ending the rollover policy would save billions over decades, too, as those unused days are counted in pension payouts to state employees.
Many private sector companies are turning to benefit programs that lump sick time with vacation and personal days to trim costs and better manage productivity. They are also more carefully tracking employee time off and working with employees to encourage adherence to company policies.
Given that every state agency only rates the performance of a fraction of the employees it is supposed to monitor, merely fulfilling that responsibility could go a long way toward stopping inappropriate use of sick days for vacation and personal time.
At a time when the state faces a $700 billion deficit in the current fiscal year and bigger deficits in coming years, taxpayers can no longer afford to offer benefits to state employees that did not make sense in boom times.
Besides, private sector workers will not enjoy similar benefits, so fairness dictates state employee benefits more closely mirror the ones offered to the people who pay their salaries. And the higher productivity from reforming leave means the state needs fewer people to fulfill its mission. Without these changes, state residents can only expect a higher tax bill when the recession subsides.
Examiner columnist Marta Mossburg is a senior fellow with the Maryland Public Policy Institute and lives in Baltimore
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