[T]he Shumlin administration hopes that 300 Vermont employees will take retirement this year under an incentive package intended to help the state save $10.8 million in personnel and labor costs.
Secretary of the Administration Justin Johnson told the Senate Appropriations Committee that the plan would offer a range of incentives for state employees who are at least 62 years old, or have logged more than 30 years in service with the state. The committee will decide whether to OK the proposal and include it in H.490, the budget bill.
Employees who have been working for the state for five to 15 years would receive $750 per year of employment. Those with 15 years or more of service would be eligible for $1,000 per year that they worked for the state. The maximum under the incentive is $15,000.
According to State Treasurer Beth Pearce, approximately 915 employees are eligible for retirement now. No more than 300 can receive the incentive.
In order to book the labor savings, the state will only be able to fill a quarter of the positions left vacant by retirees. Johnson said that this is a catalyst for the state to decide where to make changes in staffing.
“In a sense, this is kind of a trigger … telling us which programs we need to go to next to work out how we can do that work in a different way,” Johnson said.
Altogether, the administration has found $4.5 million in labor and personnel savings, including the retirement incentive and savings from exempt and temporary workers. That leaves $6.3 million still to be identified.
Some members of the committee were skeptical about the plan to leave so many positions vacant.
“It seems to me that something’s got to give here,” said Sen. Dick McCormack, D-Windsor. “Either we’re saying to these folks they’re not pulling their weight in the first place, or the work they were doing didn’t need to be done, or that the work in the future is not all going to get done.”
Johnson worked with Pearce and the treasurer’s office to draw up the language to ensure that in attempting to find general fund savings, officials do not inadvertently leave a hole in the state’s retirement fund.
Pearce said she supports the measure, but warned that the retirement incentive must be coupled with attempts to curb labor costs in the long term. In the five years after the previous retirement incentive in 2009, she said, the state added 543 positions.
“If we’re going to do this, we need to do it … with the recognition that we have to look at the workforce issues,” Pearce said.
Steve Howard, executive director of the Vermont State Employees’ Association, said union members are pleased to see the administration propose personnel savings that do not involve layoffs.
However, Howard said the loss of so many positions — as many as 225 net jobs — under the retirement plan would likely lead to an increased workload for state employees.
“The loss of these positions really means that the state workforce is going to work harder than they have,” Howard said.
