Bryan releases fiscal analysis of public-sector minimum salary mandate

Gov. Albert Bryan Jr. on June 17, 2025, released an initial fiscal impact analysis of legislation passed by the 36th Legislature that would raise the minimum salary for public-sector workers from $27,000 to $35,000 effective Oct. 1, 2025.

According to the analysis, the measure would increase government payroll and fringe-benefit costs by about $40 million a year, raising total payroll from $488.9 million to about $529 million, an 8.2% increase.

The analysis said the law would directly affect 679 central government workers, but would also require salary adjustments for more than 5,200 other employees because of salary compression. It said the measure did not account for more than 4,100 employees in semi-autonomous agencies and instrumentalities who could seek comparable increases.

The administration said the measure could add between $120 million and $200 million to the territory's debt over the next three to five years unless offset by new revenue or cost-saving measures. It also said the increase could generate about $6.1 million in new tax revenue, which it said would not cover the projected cost.

The analysis also cited an additional 3% employer contribution to the Government Employees' Retirement System as a factor that would increase long-term pension liabilities.

Bryan said the administration supported higher pay for workers but argued the increase should be phased in and paired with broader planning. The administration recommended implementing the increase over three to five years, conducting a compensation and classification study, identifying operational efficiencies, and improving workforce data collection across agencies.

Official source: https://www.vi.gov/governor-bryan-releases-initial-fiscal-impact-analysis-on-legislative-minimum-salary-mandate-2/