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Create, Budget & Utilize Positions
Introduction
State Capitol Building
The following is an introduction to fundamental budget-related issues for state employees and positions. For more information about the budget visit the Chief Financial Office website.

 
State Budget for Positions
 
The state’s budget process results in a specific number of positions being authorized as each agency’s budget passes in the legislature.  Two terms are used in reference to measuring state employee resources in the budget:  position and full-time equivalent (FTE).
 
The term position is used to measure the number of slots regardless of whether the position is full-time or part-time. 
 
The term full-time equivalent (FTE) accounts for the amount of time each position is budgeted.  For example, a full-time position that is budgeted for all 24 months of a biennium is 1.0 FTE.  A position filled full-time for only 12 months of the biennium or is a half-time position is 0.5 FTE.
 

 
Limit to Number of Positions
 
Oregon Revised Statute (ORS) 240.185 limits the number of state employees to 1.5% of the state’s population in the prior year.  Certain employees are exempt from the limit in ORS 240.185, including employees of the Legislative and Judicial Branches, Governor’s Office, Secretary of State, Treasury, Employment Department, and employees of the University System that are funded by gifts, grants and contracts programs.

 
Uniqueness of Positions
 
Each position has a set of specific characteristics including budget authorization number, salary level, job classification and funding mix.  A position is grouped or classified with other positions that have similar duties, responsibilities, pay, qualifications and authority.  Positions are grouped in similar occupational categories such as financial management, health care, human resources, biologists or managers.  Some classes have only a few employees because of the uniqueness of the duties, while others like the clerical and management series have hundreds of employees because the general duties are very similar from one agency to the next.  The Department of Administrative Services (DAS) reviews and revises classifications as part of an ongoing maintenance to the classification plan.

 
Reclassification
 
A state agency uses a process termed “reclassification” (reclass) if it wishes to change the position classification.  A reclass of a position must be approved by DAS. The agency must identify a business reason for the change, including: 
  • New agency priorities based on a new law or other change in direction
  • An agency reorganization leading to added duties for an existing position
  • In some cases, greater responsibilities are placed on a position
  • The need for a new skill set because of a change in technology or business practice.   
The Executive Branch may reclass a position if it meets a number of steps, including:
  • The proposed position classification was reviewed by a human resource professional
  • Resources are identified in the current budget to fund any resulting increase in spending
  • Permanent financing is prepared to ensure the reclass will not increase costs in future budget periods. For example, if an agency determines a position must be reclassified upward, the agency must identify another position to reclass downward to provide the budgetary resources.
The Legislature can approve a position reclassification as a part of the budget process or through Emergency Board action without meeting the requirements outlined above.
 

 
Flexibility
 
Permanent positions cannot be established without legislative approval. DAS Budget and Management (BAM) may approve a limited duration position if the position can be financed with existing resources, will not produce future budgetary increases, conforms to approved salary policies and other limitations do not prohibit approval. Limited duration positions are authorized only until the end of the biennium in which they were created and only become permanent with the approval of the Legislature.

 
Position Types
  • Permanent full-time positions continue from one biennium to the next unless eliminated by the Legislature.
  • Permanent part-time positions continue from one biennium to the next but are authorized and budgeted for less than full-time.
  • Seasonal positions, both full-time and part-time, are only required for part of a year to meet seasonal workload and may continue from one biennium to the next.
  • Limited duration positions, both full-time and part-time, are used for positions whose source of funding is not permanent (e.g. grants or contracts) or the services are required for a short time period. Limited duration positions are only authorized for the current biennium unless reauthorized by the Legislature or DAS for another biennium.
  • Academic positions, both full-time and part-time, are located either at the School for the Blind or the School for the Deaf.  The Oregon University System (OUS) positions are not included in the statewide Position Inventory Control System (PICS), the primary budget tracking system for state positions. OUS has its own position control system.
  • Temporary employment  is used to perform specific functions and to meet emergency, nonrecurring or short-term workload needs.  There are no positions for temporary employees and they do not appear in total budgeted position counts.  The amount of time a temporary employee can work is generally limited to six months out of each 12 month period. Temporary employees are not eligible for flexible benefits (e.g. health insurance), but retirement contributions are paid for individuals who are employed as temporaries for more than six months. 
 

 
How Positions are Funded
pie chart
 
Each position has a specific funding mix: General Fund, Lottery Funds, Other Funds, or Federal Funds.  General Fund-only positions are found across state government but are concentrated in the Department of Corrections, Oregon Youth Authority, Oregon State Police, the Judicial Branch and the Legislature.  A percentage of positions are funded with a combination of General Fund and other sources. These positions are predominately located in the Department of Human Services and the Oregon Youth Authority where General Fund is used to match Federal Funds.  Other agencies with positions funded in part with General Fund include the Judicial Branch, Department of Justice (Support Enforcement) and Department of Revenue.  Almost half of all state positions have no General Fund resources.  A majority of these positions are in the Departments of Transportation, Consumer and Business Services, Employment, Administrative Services and the natural resource agencies.  Less than 1% of positions have no funding designated.  Most of these are “pro-tem” judges (retired) used by the court system to meet the demands of court activity.

 
Determining Salary
 
Each employee is assigned a unique position with a specific classification and salary range.  The employee’s salary rate must be within that range. Salary ranges have several steps. Each step is approximately 4.75% greater than the previous step.  A newly hired employee is generally hired at the first or second step.  Once a year, the employee is usually eligible to receive a step or merit increase. The date of the increase is referred to as the salary eligibility date.  Once employees reach the top step of the salary range, they are no longer eligible for further step or merit increases. In years they are authorized, general increases are given to represented employees as set by collective bargaining agreements and for non-represented employees as set by the Governor.

 
How Positions are Treated
 
The budget for personal services such as salaries, benefits and retirement is based on information for each position using the Position Inventory Control System (PICS). The sequence of steps in building the budget relating to positions is outlined below.
  • In the spring of even numbered years (generally after the April Emergency Board meets) information for individual positions is subject to a process termed the “PICS freeze.” At the time of the freeze, existing salary and related Other Payroll Expenses (e.g. health benefits, retirement), are used to project costs for the upcoming biennium. After the freeze date, any changes to information on an individual position such as changes in classification, are not included in and do not change the base budget projections.
  • The salary for each position is usually adjusted for any scheduled merit or step increases for salary eligibility dates remaining in the current biennium and for any scheduled general increases. 
  • Adjustments are made to provide 24 months of funding for the budget of the next biennium for positions phased in during the current biennium.
  • Funding for one merit or salary step increase is provided in the development of the next biennium where the employee has not reached the top step. This applies to agencies with more than 10.0 FTE and the resources for the second step increase for eligible employees must be funded by savings in the agency’s budget.  Agencies with less than 10.0 FTE are provided resources for both merit or step increases since smaller agencies usually have less staff turnover or other budget savings.
  • If a position is vacant at the time of the PICS freeze, funding for that position is provided at the second step of the salary range.  All merit or step increases and general increase adjustments are factored into the calculations as if the position were filled.
 

 
Double-Filling
 
Agencies use a process called “double-filling” when more than one person is assigned to a single position. There is no additional funding available to an agency if it decides to double-fill a position. Double-filling is not used to permanently increase legislatively approved staffing levels. An agency must identify savings elsewhere in its budget or reprioritize its resources to fund the additional costs of a double-fill.  Vacancy savings are a primary source of funding for a double-fill. DAS’ administrative rules list specific purposes for a double-filled position, including:
  • To cover or backfill for an employee on leave when other alternatives, such as  temporary employee appointment, do not work
  • Short-term transition and training when an employee will soon leave state employment
  • Job sharing when the total FTE of the employees assigned to the position is no more than one FTE
  • When a position is awaiting establishment in the PICS system
  • To address a specific budget issue when directed by BAM
  • For emergency workload need. 
 

 
Why Positions are Vacant
Conference Table
 
At any given time, roughly 10% to 15% of authorized state positions are vacant.  The reasons include:
  • Position turnover: Someone leaves a position through retirement or other reasons and the agency is in the process of filling the position.  The hiring process can take weeks or longer after factoring in recruitment, interviewing, criminal records checks and other activities that occur prior to a hire.  Some positions take longer to fill if they are in a field with shortages of viable candidates.
  • Double-fill funding: Agencies leave positions vacant to provide funding for another position that might be double-filled.
  • Seasonal: A small percentage of positions, excluding higher education positions, are seasonal in nature and may be vacant depending on the time of year.  Many natural resource agencies depend on seasonal positions for their core functions.
  • Eliminated (abolished) positions: At any point in time there may be positions that were abolished but continue to be in PICS until the end of the biennium.
  • No funding: When a position depends on a revenue source that is not generating the anticipated amount or is terminated, the position may be left vacant until there are sufficient revenues.  If there is a long range revenue issue, the budget process generally results in a review of the program and abolishment of positions.
  • Phase-in positions: A position may be created during the legislative session, but the funding for the position is not scheduled to phase-in or begin until later in the biennium. An example of this is a caseworker or eligibility worker position tied to caseload growth that is projected to occur later in a biennium. The position is filled when the funding becomes available.
  • Unbudgeted costs: Agencies often leave positions vacant to provide resources for costs not included in the agency’s budget. These may include unanticipated costs such as health care, growing caseloads, overtime and utilities.
  • Overall budget shortfalls: Budget shortfalls can occur due to specific and unspecified reductions in the budget.  Correcting budget shortfall can take the form of allotment plan reductions, hiring freezes and positions left vacant.
  • Post-factor: Vacant positions also occur because of staffing patterns for 24-hour institutions. For example, the Department of Corrections applies a “post factor” to specific positions that must be staffed 24 hours a day, seven days a week within a correctional facility.  This drives the need for more than 1.0 FTE to provide all of the resources for the 24-hour period. A  part-time position is established to provide the necessary resources beyond the full-time FTE.
  • Reorganization: A reorganization of an agency or program may leave positions unfilled until final decisions are made on the responsibilities and classifications of the positions.
Review of long-term vacancies (over six months) provides the best opportunity to determine whether the agency still needs the positions. Even for long-term vacancies, the largest share of unfilled positions are in the process of being filled.
 
On a quarterly basis, agencies report any position that has been vacant for at least six months (ORS 291.263). DHS and Corrections must report biennially to the Legislature on the number of vacant positions and their impact on delivery of services, use of overtime, use of temporary employees and employee workload (ORS 291.371).
 

 
Vacant Positions Effect Budget
 
The formal budget process utilizes a vacancy factor calculation, which estimates the budget savings expected to occur because of staff turnover. This calculation uses turnover history in the previous biennium and accounts for cases where the vacancy savings are used to fund other personal services costs, including double-filled positions and temporary employees. Vacation payouts of employees leaving employment, as well as benefits and other personal services costs, are factored into the calculation.
 
The Legislature, as part of its budget process, reviews vacant positions to achieve further savings. At times the Joint Committee on Ways and Means eliminates vacant positions for budget savings. The elimination of vacant positions is labor intensive since each position has to be reviewed to determine whether it is necessary to be retained. In addition, a vacancy list is only current on the day it is printed, since positions are always being filled or vacated in the normal turnover of state employees.
 

 
Contracting Out Work
 
Some state funded services are already “contracted out” to private businesses and organizations. Some examples are: medical-related services through the Oregon Health Plan, senior and disabled services, road construction and maintenance, information systems development, various laboratory services, firefighting, fish production functions, vehicle repair and maintenance, state park concessions and mental health treatment services.
 
Collective bargaining, through case law and state statute, assumes that contracting out is a mandatory bargaining subject since it affects job security and wage issues. Generally, this means the impact of the decision is bargained.
 
In addition to policy considerations, certain requirements must be met prior to contracting out services or functions state employees currently provide. Collective bargaining agreements may outline the requirements and may require agencies to complete feasibility or other agency development forms.