With state employees losing their jobs in a dreary economy, the last thing you'd expect lawmakers to be talking about is ways to fatten worker pay and benefits.

In what may qualify as an unfortunate coincidence, the General Assembly's investigative arm -- the Joint Legislative Audit and Review Commission -- yesterday rolled out a two-year study of employee compensation.

The analysis -- coming amid the layoffs of 570 employees and the likelihood of more -- spotlights alternatives for improving wages, health insurance, pensions and leave, as well as steps for reducing the spiraling costs to government of insurance and retirement.

Hoping to save jobs as they wrestle with a ballooning cash shortfall, lawmakers ruled out implementing next year any JLARC suggestions. At the earliest, some could be woven into Gov. Timothy M. Kaine's farewell budget in January 2010.

"There's enough angst already with state employees," said Del. M. Kirkland Cox, R-Colonial Heights, JLARC chairman and a senior member of the House Appropriations Committee.

The study -- available on JLARC's Web site, jlarc.state.va.us -- focuses on the largest bloc of the state's 116,000-member work force: nearly 74,000 civil service, or classified, employees. The study was ordered by the 2006 General Assembly.

Among the suggestions: additional regional salary differentials for employees in high-cost areas of the state, such as Northern Virginia; and requiring workers to make modest contributions toward their fixed monthly benefits under the Virginia Retirement System to keep the fund flush.

Other ideas: Restyling the health insurance program to emphasize preventative care and more broadly disperse the cost of coverage among the state and employees. On time-off policies, the report says one option for unused leave should be cash payments.

The state's largest worker group, the 18,000-member Virginia Governmental Employees Association, struck a cautious note, having previously criticized Kaine for postponing a 2 percent pay raise as part of his budget-balancing plan.

"If the end result leads to improvements in the state compensation system, then it will be a welcome effort," William P. Elwood, VGEA executive director, said in an e-mail.

"If, however, the intent is to find a way for the state to save more money at the state employees' expense, then obviously, it will not be so well-received."

The study, prepared with compensation experts hired by JLARC, said an update of salaries and benefits is necessary for recruiting and retaining employees. Further, changes are necessary to control costs for taxpayers.

"Our goal is to make the entire employee-compensation [system] fairer and more attractive, and work better for employees," said Senate Minority Leader Walter A. Stosch, R-Henrico, who, like Cox, represents thousands of state workers in the Richmond area.

In Virginia, where annual employee compensation costs exceed $5 billion, workers rate job security and stability as the No. 1 reason for careers in state government, followed by health, retirement and leave benefits, JLARC said.

However, the commission said, one in three employees cite salary as a reason for leaving the state work force. Other concerns: limited career opportunities and poor management.
Contact Jeff E. Schapiro at (804) 649-6814 or jschapiro@timesdispatch.com.