South Dakota State Employees allege lawmakers conflict of interest suppresses wages

The South Dakota State Capitol Building in Pierre.
The South Dakota State Capitol Building in Pierre.(Austin Goss DNN/KOTA)
Published: Nov. 5, 2022 at 9:39 AM CDT
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SIOUX FALLS, S.D. (Dakota News Now) -If you drive down nearly any South Dakota street, you’ll find businesses with help wanted signs, paying impressive wages. But a group of State employees is concerned that state lawmakers are intentionally suppressing their wages.

The lawmakers in question include Republican State Senator John Wiik of Big Stone City, who made the comments in an appropriations committee meeting. Wiik lists his job in the legislative handbook as a parts manager.

“So if I started losing mechanics to a state shop, you’d hear from me,” said Wiik.

This raises concerns by state employees of a conflict of interest when a lawmaker, who also works outside of his Legislative duties, may have ulterior motives to keep state employee compensation low.

Senator Jack Kolbeck is concerned if that market changes, private sector pay would decrease while state pay could be locked in. Kolbeck works for a distributing company in Sioux Falls.

“Government Sector, that starting salary, will stay there. So then in the private sector, we’re going to be competing against those salaries that are being paid at the government level,” said Kolbeck.

Senator Wiik, running unopposed in the November 8th election, wants to clarify what he said in committee.

“That’s the point I was trying to make in that hearing, is that if we’re paying DOT mechanics 45 bucks an hour, but then my tax dollars and being used to take my employees out of my own shop, and that’s where we start running into problems,” said Wiik.

South Dakota State Employees Organization director Eric Olilla says this has been an ongoing frustration and issued a statement on the matter, saying, " Governors and the legislature must stop the purposeful compensation discrimination.”

What most do agree on is an excellent retirement package. The challenge, however, is hiring an employee and keeping to get to retirement.

Republican State Senator Steven Haugaard has seen the change over the years as he recalls state and Minnehaha county employees staying for decades.

“You’d rather just have long-term employees that know their job and can provide customer service. But if we’re going to be cutting back on state employee compensation to the point where we see high turnover or a lack of application, that’s a real problem,” said Haugaard.

“I’ve been with the South Dakota State Employees Organization for 11 years now. Most of the first several years of Gov. Daugaard’s governorship saw state employees being treated mostly fairly, with cost-of-living adjustments to track with or over inflation and a fully funded program called “career banding,” where employees in job classes that were severely underwater as compared to the private market saw additional raises that would give the employees some parity. That all changed the last two years of Daugaard’s governorship, and it has only gotten worse every year since.

How has it gotten worse? Well, there is no more career banding; it was canceled so hard I have to keep reminding the same people over and over again that it ever existed. And the Legislature itself now gets special raises to track with all state households, as the Legislature is not foolish enough to tack its own pay to state employee compensation when private-side incomes are increasing and state employee pay is coming in at less than inflation. And with gubernatorial tacit acceptance, the Legislature also removed its own employees from general pay structure and has given them raises over and above what they have given almost all other state employees.

And the Legislature's Executive Board recently approved a compensation proposal for their employees in Legislative Audit that calls for them to receive special raises plus a new thing called "parity raises" plus the governor's recommended COLA to the general pay structure. They have purposely created separate and unequal state employee compensation. The SDSEO feels such care and concern and respect should be provided to all career state government employees, not behind the scenes or in special backroom deals, but in public, in the State Budget Address, in the State of State Address, in testimony, and everywhere else. And "parity pay" must be adopted across state government so that when new hires get raises to scale, every single employee in the job grade must get those same raises. Governors and the Legislature must stop the purposeful compensation discrimination.

And even worse, now we have legislators, members of the Appropriations Committee, openly saying that the deliberate restriction of state employee compensation is not only desirable but is a demand of them, and if their demands are not met, well, it’s left to the imagination, threats and all. The slippery slope has been washed out and is now more of a flume.”

Eric Ollila, Executive DirectorSouth Dakota State Employees Organization