State Agencies Offered Retirement Deals To Trim Budgets
AUSTIN (AP) – Some Texas state agencies facing severe budget cuts used financial incentives ranging from $10,000 to $25,000 to entice eligible employees to retire.
Incentives have contributed to more than 5,400 retirements from state agencies this year, almost 900 more than last year, the Employee Retirement System of Texas reported.
The incentives have helped the agencies save millions, according to a report in the Austin American-Statesman.
The Department of Agriculture provided a $12,500 retirement incentive that cost $637,500. The resulting annual savings is $2.5 million.
“Faced with a 40 percent reduction in state appropriations, the Texas Department of Agriculture offered the retirement incentive to assist in meeting the budgetary needs and to provide more flexibility in an agency-wide reorganization,” agency spokesman Bryan Black said.
The General Land Office offered $25,000 to people who were eligible to retire at a total cost of $1.3 million to streamline the agency. At the Texas Water Development Board, nine people took a $10,000 retirement package, saving nearly $556,000 a year.
The Legislature quashed more than 5,700 positions, or about 2 percent of the 241,000 jobs in the previous budget, as it cut $15 billion from Texas’ 2012-13 budget. Agencies were given discretion in deciding who had to go — and under what circumstances.
Many of the positions were open at the time, allowing them to go unfilled rather than resulting in more layoffs. Some agencies also instituted hiring freezes in anticipation of the cuts.
Still, at least 800 state workers have lost their jobs since the beginning of the year, according to a Statesman survey of state agencies. There is no centralized count of layoffs.
Many of the workers were given one to two months of paid leave. The 440 employees laid off from the Texas Department of Criminal Justice, however, only received their accumulated vacation and overtime, as do all state employees when they leave, spokesman Jason Clark said.
The sudden influx in new retirees and fewer employees contributing to the pension had an impact on the fund’s health. Concern about the pension fund is one reason that legislators did not seriously consider a sweeping retirement incentive this time.
Even with the retirement incentive, the Water Development Board laid off 39 employees and gave each of them two months of paid leave.
“We realized the economy is bad out there. It’s a difficult time for people to find jobs. We wanted to afford our employees sufficient time to find opportunities out there,” said Lisa Glenn, deputy executive administrator at the Water Development Board.
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