Committee proposes HR market-factor review, trims direct pay appropriation to $150,000

A committee member speaking at a Conference Committee on Appropriations meeting May 6 said the panel would include language directing the state human resources office to perform a market-factor analysis for several classified positions rather than immediately appropriating the full requested sum. The committee also discussed reducing a direct appropriation from $300,000 to $150,000 while keeping the new positions in the budget.

The committee said the HR review would use the state’s standard personnel process — a market-factor adjustment or routine HR review — to determine whether pay increases are justified and to implement any increases through HR systems rather than by a one-time legislative augmentation. "Instead of just adding the money in, we'd like to propose that we add language basically directing HR to do this analysis," the committee member said.

Why it matters: committee members said Vermont is competing with other states for talent and that retention risks can be addressed more reliably by an HR market analysis than by ad hoc appropriations. One senator said current compensation appears “on the bottom” of the market and that movement might raise pay from roughly the 10th percentile toward the 30th percentile, which could reduce turnover.

Discussion: Senators and committee members flagged timing and precedent concerns: some argued that routing pay adjustments through HR avoids creating a recurring legislative precedent in which every under-market job is addressed directly by lawmakers. Others said timing could be critical and asked how quickly HR could complete the analysis and implement changes so the state would not lose employees in the near term.

Direction: The committee agreed to draft language that (1) directs state HR to perform a market-factor review for the identified classified positions, (2) specifies that any adjustments be implemented through the state HR process, and (3) leaves $150,000 in the bill as a reduced appropriation pending the results and potential follow-up budget adjustments. Committee members said the reduced appropriation could be supplemented later if HR’s analysis supports it.

Next steps: Committee staff said they would draft the language and seek timetable information from HR; members asked for an estimate of how long HR would need to complete the analysis so the committee could determine whether additional interim funding or spending authority was needed.