You can put another thing to the list of reasons drafting the next state budget won't be a cake walk: the commonwealth's labor costs are likely to go up next year.
In recent years, new governors have had to revisit contracts for most of the state's roughly 73,000 employees within their first year in office. The same is true this time.
Most contracts will be up next July, and renegotiation means pay raises and potentially higher costs for employee health care and leave.
Dan Egan, spokesman for the Office of Administration, said labor costs have been steadily rising for the past several years.
"There's no reason to not expect them to continue on an upward trajectory," said Egan. "It's just a question of by how much."
That's not welcome news to Governor-elect Tom Wolf, who could face a nearly $2 billion spending gap next year.
Administrations can temper the rate at which labor costs rise. According to Egan, the pre-Recession negotiations of 2007 set most pay raises at 10 percent. Four years later in 2011, raises were trimmed to 4 percent.
