Jerry Brown moves to eliminate retiree workers
Sacramento Bee June 13, 2012
As Friday's state budget deadline approaches, a little-noticed provision in Gov. Jerry Brown's proposal would cut off thousands of retirees who return to work for the state.
The idea targets all but the most essential of the state's so-called "retired annuitants," a group of about 5,800 workers who drew $110 million in pay from the state last year on top of their pensions.
The Democratic governor's proposal could strike a chord with taxpayers by appearing to crack down on double-dipping. It also appeals to public employee unions – which want to eliminate jobs they believe stunt the growth of the regular workforce – at the same time he's asking union workers to accept furloughs and a 5 percent pay cut.
Though axing retirees may score points with Brown's political base, critics say the practice would cut off experienced, flexible and relatively cheap help. Retired annuitants receive no benefits and can be laid off without notice.
"The underlying policy is silly," said Mike Genest, state finance director under former GOP Gov. Arnold Schwarzenegger. "It's false populism."
The state has used retired annuitants for years, and many workers have factored that into their retirement plans. Still, union leaders are just as happy to see them go.
"We need to get rid of retired annuitants, because they've already worked for the state and they have their retirement," Service Employees International Union Local 1000 President Yvonne Walker said Saturday during an online town hall meeting with members to discuss furlough negotiations. "In addition, having them in place, it blocks the way for upward mobility. It blocks the way for our people to move up. This is not right when you're looking at cutting employee rank-and-file compensation."
Lynelle Jolley, spokeswoman for Brown's Department of Personnel Administration, said Tuesday that the governor is taking a hard look at retirees as part of his negotiations with the unions.
"DPA has been meeting with agency secretaries to ask their departments to identify which retired annuitants are mission-critical," Jolley said.
It remains unclear whether the move would save the state money, or whether it would be permanent.
Retired annuitants are a small piece of the state payroll – just 7 cents of every $10 paid to workers during calendar 2011 went to returning retirees, who can work up to 960 hours during a fiscal year without affecting their pension checks.
The figures don't include employees of the state's university systems or the Legislature.
As a group, retired annuitants have been an easy target for politicians and labor, stoked by high-profile stories of abuses.
Florida recently extended how long public employees have to wait for government work after a series of double-dipping reports, including a state attorney who cashed out his leave for more than $500,000, started collecting an $8,500-a-month retirement check – and in 30 days returned to his $153,000-a-year job.
Florida's new law requires retired public employees to wait six months before returning to government work.
In California, relatively few state retirees pull down big paychecks. Last year, 14 state workers earned more than $100,000 Most were doctors, according to state payroll records. Another 260 earned more than $50,000, a mix of administrators, consultants and medical professionals.
Most state retirees earned far less, with the average annual wage running about $19,000. They can't take work that pays more than the job they left, although they can accept positions that pay less.
Retirees don't have job guarantees, so they can be let go without an employer navigating the labyrinth of civil service protections and labor contract rules that govern the layoff process for regular state employees.
"There's a business case to be made that you should hire more of them," said Genest, a state pensioner whose former boss once ordered the state to thin the retired annuitant ranks. "They've already done the work. You don't have to wait for them to figure out what they do. And you can turn them on and off. Hire a state worker, and it's goodbye in 30 years."
At the Department of Corrections and Rehabilitation, nearly 1,000 retirees perform an array of tasks in the 63,000-employee agency, from clerical work to handling inmates. Beset by legal and financial pressures for years, the department has terminated hundreds of employees as the state shifts more convicted inmates to local jails.
"We're looking at every retired annuitant in our system," said Terri McDonald, undersecretary of operations for the department. "When a position doesn't meet our critical 24/7 requirements, it will be canceled. But when RAs do meet a critical need, we'll keep them on. There will always be some RAs on our books … because some important roles can be difficult to fill through regular staffing."
The department uses retirees to mentor wardens and other top-level employees, transport inmates for medical care and fill hard-to-recruit positions such as cooks and other operations staff in some institutions.
Jim Coe, 74, worked for the state for 40 years before retiring. For the last 13 years, he has worked as a retired annuitant with the Department of Water Resources, where, as a flood control expert and former branch chief, he fills in "when we need some regulation-writing expertise."
"I didn't get rich working for the state," Coe said. He uses the extra money he earns as an annuitant for trips that he couldn't afford when he was a full-time employee.
He scoffed at the notion that retirees like him rip off the state.
"It's a way for the state to take advantage of its investment," Coe said, noting that he draws no benefits and can be released at any time. "I think the conditions they put on us are fair. It's a good deal for me and I know it's a good deal for the state, too."
The Sacramento-based California State Retirees Association assists members with finding state jobs. At any time, the organization handles about 400 applications.
The organization recently surveyed its members and found that many need more money to cover increasing health care costs.
"It's little wonder, then, that retirees are interested in the (retired annuitant) program," said Susan Sears, the organization's president. "For some of them, it could be a vital lifeline."