Appropriations Committee Approves Pay Increase for State Employees (Dem-NPL proposal defeated on a party-line vote)

(BISMARCK, N.D.) – The Senate Appropriations Committee voted today to provide state employees with a 2 percent raise each year during the 2021-2023 biennium.

Before the vote, Sen. Tim Mathern (D-Fargo) proposed a Democratic-NPL plan to provide employees with 3 percent raises each year. The key difference between the two plans was how to address the growing shortfall in the state employee retirement fund. Both plans would provide a 2 percent net increase because the Dem-NPL plan also required a 1 percent contribution to the state retirement fund. The committee declined to support that proposal.

Historically, state pay increases have not kept up with the private sector, leading many employees to leave the state for better opportunities.

“I am encouraged that the committee agreed a 2 percent increase is the right thing to do for our employees,” said Mathern. “But I’m disappointed that we aren’t doing anything to fix the problems with the retirement fund.”

The state retirement fund is facing a nearly $3 billion shortfall and needs a major cash infusion to ensure the fund remains solvent. “We made a promise to our employees, and we must make sure this benefit remains intact,” Mathern said. “We can’t afford to keep kicking the retirement can down the road.”

The approved plan also establishes a floor and ceiling for the pay raises. This provides fairness for lower-income employees and saves money by limiting raises for those with higher incomes. The approved bill set the minimum increase at $80 per month for employees making less than $48,000, instead of $120 per month in the Democratic plan. It retains the $300 per month cap on those making more than $120,000.