One-time bonus — but no pay raise — for state employees

Gov. Eric Holcomb celebrates federal approval of the state’s broadband application in a call with reporters on Monday, July 8, 2024. (Screenshot)

Gov. Eric Holcomb is giving a one-time bonus to all state employees, but no pay raises this year after a modest revenue forecast.

“It is important to recognize your efforts to improve the lives of Hoosiers but also in a way that our current state biennial budget, which ends June 20, 2025, will support,” he said in a letter sent to state employees Monday morning.

“In most years, we have been able to provide employees with a base-building salary adjustment; this time, full-time employees of the executive branch employed on or before Dec. 20, 2024, will receive a one-time, non-base building stipend of $1,250 in their Jan. 15, 2025, paycheck. Part-time and intermittent employees will receive $650.”

That stipend will cost state coffers between $20 million and $22 million, according to budget officials.

Indiana has about 32,000 full-time state employees – the highest in recent memory. The number has grown steadily except for a dip around the pandemic.

Last year, state employees received a performance-based bonus between $500 and $1,500 as well as a 3% cost-of-living adjustment or pay raise.

To address low pay, Holcomb previously implemented a $1,300 salary increase, followed by a 2.5% salary increase for all state employees in January 2022; this salary adjustment resulted in an average increase of 5% for employees and was the first general salary increase in Indiana since 2008.

Pay raises incoming for Indiana’s highest elected officials

The move to deny pay raises comes as statewide elected officials will receive substantial hikes starting in January. Lawmakers included the increases in the current budget. For instance, the governor’s pay will jump from about $133,000 to $221,000. Similar hikes were included for lieutenant governor, attorney general, comptroller, treasurer and secretary of state.

After back-to-back years of explosive revenue growth, fueled by federal dollars and an uptick in consumer spending, Indiana’s incoming dollars have slowed to pre-pandemic levels. Budget writers have urged their fellow lawmakers to tighten funding requests and prepare themselves for a lean two-year cycle.

In the letter to employees, Holcomb praised the significant contributions state employees made to improve the lives of Hoosiers.

“It was my great honor to cut the ribbon on the final leg of I-69 from Evansville to Indianapolis this summer, opening even greater opportunities for us from border to border. The Department of Health is finishing the first year of Health First Indiana, bringing more resources to local communities to improve the health of their residents. And I’ve traveled across the state to see the progress we’re making on capital projects that will impact Hoosiers in a variety of ways, from the Indiana Archives building in downtown Indianapolis to the new lodge at Potato Creek State Park and a state-of-the-art facility for the Department of Correction at Westville that will be known as the Northwest Indiana Correctional Facility. I’m so proud of these efforts and so many more that you are working to execute each and every day.”