Inside the Capitol

Sunday, July 19, 2009

7-24 Double-Dippers: More Harm than Good?

Syndicated Columnist
SANTA FE -- Recently an investigative reporter for an Albuquerque TV station revealed that some local city employees had retired and then returned to work, collecting both their paycheck plus their retirement, which almost doubled their take home pay.
The news anchor praised him for such a good job of sleuthing but the reporter didn't tell us anything new, except the names of some people who are taking advantage of the situation.
The practice of public employees returning to work after retirement has been occurring for years. The law was changed to allow retirees to return to work full time mainly on the argument that small towns have trouble finding replacements for many jobs.
And larger public employers have difficulty finding replacements for specialized employees. The argument also can be made that retirees already have proven their worth and don't have to be trained. They are the best people for the job.
But there are drawbacks. Current employees often resent the retirees because they step back into their top jobs and prevent younger workers from moving up. And there are charges of cronyism. Get in good with the boss and you can retire and get hired back.
Current law requires that retirees under the Public Employees Retirement Act wait three months before coming back. Soon after that law was passed, temporary employment agencies discovered a gold mine in contracting with retirees to place them back in their old jobs immediately as outside contract workers.
State lawmakers took a close look at this double-dipping during their session at the first of the year. Significant cuts needed to be made in the state budget and the state's two employee retirement funds had lost 25 percent of their assets during the previous three months.
Lawmakers weren't pleased seeing double dippers draining both their retirement fund and the state budget with paychecks that were almost twice as much as other employees. So they put some serious curbs on returning to work.
It was all a part of the Legislature's everybody's-gotta-feel-some-pain solution. In addition to almost doubling their salary, double-dippers don't have to make a retirement contribution. Their employer does that for them.
Regular employees are being docked 1.5 percent of their employer's retirement contribution but employers are still paying all of double-dippers' contributions. It was just too good a deal. So both houses of the Legislature sent a bill to the governor to cut back the goodies.
But Gov. Bill Richardson vetoed it -- on the advice of Attorney General Gary King. It was a surprising development. Richardson said he wanted to keep the best employees, while others said he and King had submitted to cronies who didn't want to fall off the gravy train.
Gov. Richardson says he knows there is a problem and that he will appoint a committee to study the situation. We haven't heard much about what is happening on that promise. A special session of the Legislature looms as a distinct possibility in the next few months.
Many lawmakers and state employees would like to see a solution hammered out then. And while they're at it, there's a little something else lawmakers should look at during the special session.
While all public employees (state workers, teachers, cops, judges, etc.) are being hit with a 1.5 percent increase in their retirement contribution that the employer previously had paid, it didn't occur to lawmakers that they also should share some pain.
They contribute $500 a year to a retirement system. There are 112 lawmakers, so that comes to $56,000 a year. The taxpayers' share is around $560,000, quite generous in comparison.
If lawmakers were to share the pain, they would each have to pay an extra $7.50 a year for a total of $840, which would be subtracted from the taxpayers' $560,000 contribution.
It's not much, mainly symbolic. But how could they forget to include themselves? Thom Cole, of the Albuquerque Journal, reports lawmakers even talked of increasing their own benefits this year.
FRI, 7-24-09

JAY MILLER, 3 La Tusa, Santa Fe, NM 87505
(ph) 982-2723, (fax) 984-0982, (e-mail)



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