Yesterday I cast the lone “no” vote on SF 2062 – the Governor and Democrats plan to lure state employees to take early retirement with the goal of saving cash in the budget.
So why break with my fellow Republicans and be the lone “no” vote?
First, I will have a hard time going home and explaining to the 1,500 constituents who just got lay off notices and are looking for work that their tax dollars will go to pay people to quit their jobs – and pay them quite well. The package is worth up to $65,000 per employee. $1,000 per year of service up to $25,000 plus five years of health care on the state plan.
In this economy I don’t think this will pass the coffee shop test. I know I can’t explain it to those folks out of work.
Second, paying people to quit should be our last resort to balance the budget – not the first step out of the gate. The legislature hasn’t passed the “Government Reorganization” bill yet (in part because the Democrats can’t come up with the Gov’s target of $300 M in savings). We haven’t seen a balance sheet to show where other general fund cuts will happen. I asked the question on the floor, if this is passed will there still be layoff and how many – and no one could provide me an answer. Bottom line, the budget is being assembled on the fly without a plan.
Third, of the people eligible for the $65,000 early buy-out, over 2,300 of them are currently eligible to retire today with FULL benefits on IPERS. Full benefit being 66% of the average of their highest three years of salary potentially for the rest of their life, with potential COLA increases.
Fourth, while the press and the Democrats portray this bill as saving $57 Million, the fiscal note shows that it results in saving only $26 Million to the General Fund – the fund that is a billion dollars in the hole. The remainder of the savings are to the road fund (DOT employees) and positions paid for with federal dollars. So again, the budget target isn’t met.
You can read the fiscal note on the bill by downloading it here:
http://www3.legis.state.ia.us/fiscalnotes/data/83_5589SVv0_FN.pdf
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