Again, you're smart enough to know what 'normal' is. 'Normal' is cost of living raises, continued employer provided healthcare (which goes up in price every year), and ~~5% cost inflation for any organization that employs people. States have been cutting relative to that.

The crappy part is that a huge % of the rollover cost is healthcare, so it's not even going to their employees.

According to Keynesian theories of economics, recessions are the product of sticky nominal wages combined with an exogenous shock.

Real wages need to go down in order for the recession to end, which is why inflation is promoted as the cure. Wages are sticky downwards, there is no reason to raise them, particularly for monopsony employers.

Sure. But healthcare is most likely driving their comp costs more than pocket wages. Healthcare is what's driving state/local government costs because of the high head count of middle class professions. Salaries might go up by 2-4% depending on the collective bargaining agreement with the union, healthcare will go up by 15%.

Basically, states and local governments aren't operating with a macro worldview of the whole economy, they're trying to balance their own budget. They're going to eat it on healthcare, pay as small a COL raise as they can get the public employee unions to accept (pretty small actually), and lay off employees on the stupid last-in-first-out basis that the unions insist on. Decision makers at the state level are just trying to get through the year.

The funny thing is that a liberal can look at those ballooning healthcare costs (biggest $ item in the deltas year-over-year) and see it as a private sector screwup, while a conservative can look at the total costs going up and see it as public bloat.