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Idaho bill would ban sweetened partings

Thu., Feb. 25, 2010, 5:59 p.m.

BOISE - Idaho lawmakers say it’s time to ban purchases of additional retirement service for state employees to get them to retire early - a practice that resulted in $125,000 in such state expenditures in 2009, including $72,781 for a single employee.

“This is an outrage to Idaho taxpayers and to Idaho state employees who did not receive that same privilege,” Pasley-Stuart told the House State Affairs Committee. The panel voted unanimously Thursday to introduce her bill, which next will move to the House Commerce and Human Resources Committee for a hearing.

State law strictly bans severance payments to state employees who leave their jobs voluntarily, but the retirement boosts weren’t considered severance because the payments went to the employees’ accounts at the state retirement system, not directly to the employees.

Rep. Elfreda Higgins, D-Garden City, co-sponsor of the bill with Pasley-Stuart, asked the committee, “Is this really the message that we want to deliver to the people of Idaho? Over $125,000 was paid out of the general fund in 2009. Here we are in 2010 poring over every budget, looking in all the nooks and crannies and under the rocks for money to run our state. These payouts … would pay for three teachers, tax collectors, parks workers or other services that are much more important to the people of Idaho than paying money to three people so they can retire early.”

The state Division of Human Resources paid the $72,781.58 to the Public Employee Retirement System of Idaho in October to buy extra service for its former director, Judie Wright, in exchange for her agreeing to retire eight months earlier than she’d planned. The head of the Division of Financial Management, Wayne Hammon, then took over as acting human resources director in addition to his other duties; he said the move saved the state money.

The Spokesman-Review reported in November that two other state employees were given early retirement boosts last June: A state Tax Commission employee who was being terminated for disciplinary reasons was given a $13,531 retirement boost as part of a settlement; and a printing copy technician at the state Department of Education was given a $42,143 retirement boost to allow her to retire rather than be laid off due to budget cuts.

According to state records obtained under the Idaho Public Records Act, two other state employees have received state-funded early-retirement bonuses since 2004, both as part of confidential personnel actions; one, at the State Historical Society, was for $9,648, and the other, at the Department of Lands, was for $12,500.

“Many of you know state employees who were laid off who did not receive any consideration at all,” Pasley-Stuart told the House committee Thursday. “Idaho already has a very strong severance pay policy, and that is we don’t pay severance pay. … However, the purchase of services has not been considered a part of the severance pay. This would prevent the purchase of services.”

Idaho enacted its severance-pay ban in 1993 after a political scandal involving then-U.S. Sen. Dirk Kempthorne, who paid more than $38,000 in severance bonuses to two top aides who worked for him when he was mayor of Boise, when they left city employment to take higher-paid positions on his Senate staff. The severance bonuses were paid with city funds. The move caused such a fuss that the office of the new senator, on his first day in Washington, D.C., was besieged with outraged calls from Idaho, particularly as he had campaigned on a reform platform and decried congressional perks and “midnight pay raises.”

The aides eventually paid the money back to the city, and the city revoked the severance policy that had authorized the payments. In that year’s legislative session, the state severance pay ban passed both houses overwhelmingly and was signed into law by then-Gov. Cecil Andrus.

In November, when the news came out about the retirement purchases, several top lawmakers called for changing the state law to ban the practice.

“I said at the time it didn’t seem right,” said Sen. Shawn Keough, R-Sandpoint. “I think it’s good to have the debate about what the policy ought to be.”

In November, Sen. Dean Cameron, R-Rupert, said the practice “doesn’t quite pass the smell test.”

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