News Release
For immediate release

State employees to receive 2 percent general salary increase in 2006

INDIANAPOLIS (December 20, 2005) – Governor Mitch Daniels announced today that state employees will receive a 2 percent salary adjustment in early 2006, in part due to the state’s progress toward balancing the budget. State employees also will be eligible for two bonus programs next year as the state moves toward a pay-for-performance model.

“We’ve saved hundreds of millions of tax dollars in Indiana this year, and it couldn’t have happened without state employees,” said Daniels. “State workers’ higher productivity has been one reason we are ahead of schedule in balancing the budget. It is right to recognize that contribution.”

In a letter distributed to employees today, the governor wrote, “This year state employees have made enormous improvements in the service levels experienced by our fellow citizens, while taking much greater care of the hard earned tax dollars entrusted to us by our fellow citizens. By any fair estimation, 2005 was a year of great improvement for Indiana state government and, even though we have much left to do to return a bankrupt treasury to the black, the progress deserves recognition.”

The state also increased its contribution for employee health insurance for 2006, so the total compensation increase for some state employees will be 3 to 5 percent. The salary increase will be reflected in the first paycheck in February.

The governor said the 2006 increase will be the last such general adjustment as the state moves toward the start of a pay-for-performance plan. Beginning in 2007 there will be no automatic pay increases.

"We are building a new era of performance in state government and will do more for people who do great work,” said Daniels.

The governor said two bonus programs will be offered to state employees in 2006. One program, the Governor’s Public Service Achievement Award, will reward employees who advance the governor’s objectives to improve efficiency, provide better service and stretch tax dollars. Awards of $1,000 will be given to about 100 employees in 2006 during two ceremonies.

Agency heads will reward employees directly in the other program. Those who exhibit outstanding performance through a measurable outcome, such as completing a project ahead of schedule with results that exceed expectations or creating an innovative solution to a problem, will be eligible for an award of $100 to $1,000.

Click this link to view the governor’s letter to state employees about 2005 progress: http://www.in.gov/serv/presscal?PF=gov2&Clist=196&Elist=85029

Media contact: Jane Jankowski, Office of the Governor, 317/232-1622, jjankowski@gov.in.gov