State Bennies 

State workers' benefit packages get political

At a recent event hosted by the Idaho Press Club, Gov. C.L. "Butch" Otter stood for questions from a bevy of Idaho reporters. Unda' the Rotunda asked the governor: Does the state really compete as an employer anymore?

"I think so, yeah, there's a huge advantage," said Otter. "Some businesses have had to resort to 15 to 20 percent cuts to employees' wages or salaries. When I've looked at cuts to our people, job security for state employees is probably greater than it is in the private sector."

Boise Republican Sen. John Andreason disagreed with Otter's endorsement of the state as a competitive employer. He believes the state is falling behind in its ability to retain workers.

"We've always been able to say: 'We don't pay that well, but the fringe benefits are great.' We can't say that anymore. We're giving no salary increases, and we're increasing health care costs, especially to our part-time employees. Because of the economy, we're still able to get employees."

With increasing health-care costs for state workers, layoffs and impoverished budgets, how can these state-funded agencies afford to keep trained employees? When it comes to schools, Superintendent of Public Instruction Tom Luna is forced to make a big decision.

"We have to preserve student-teacher contact times. I suspect that we will see the amount of money we see needed come from district pay cuts. All the teachers that are currently employed may need to work for less money."

JFAC was poised to set budgets for public schools March 3, rescheduled from March 1, and Luna has sat with members of multiple state workers associations and legislators to discuss how the cuts to schools will take shape.

While much of the hole left in the schools budget will be backfilled with one-time monies, the $1.2 billion budget still faces an ongoing cut of general fund appropriations, down from $1.4 billion in 2009.

"This budget is a result of the worst economy we've seen in a lifetime," Luna said. "How do we operate our schools with less money than we had last year--considerably less? How we structure this budget is going to decide on whether we minimize the negative impact or not."

Negotiations involve cutting some programs, including field trips and, potentially, eliminating line items for school supplies and other things deemed nonessential. Sherri Woode, president of the Idaho Education Association, feels the state can't simply cut schools.

"To say that we're going to keep these cuts away from children is just not true. You can't cut 10 percent from school budgets and not affect kids. How you keep things together is talking about how to increase revenues. Trying to cut our way out of this economic downturn is not going to work. If we continue down this route, we will not have any public services in this state."

Teachers' retirement plans are also in question. Last week, the House cast a party-line vote to block a 1 percent cost of living adjustment for state retirees. The Public Employee Retirement Service of Idaho suggested an increase for former employees receiving benefits.

After the Commerce and Human Resources committee put HCR 42 on a fast track, numerous groups opposed the move. The AARP of Idaho, the Idaho Educators Association, the Idaho Retired Educators Association and the Idaho Public Employees Association all balked at the measure to reject the PERSI board's recommendation.

The bill met its demise when it hit the desk of Andreason, chair of the Senate Human Resources committee.

"It affected 33,000 people with no cost to the general fund," said Andreason. "It seemed like the thing to do to take care of it."

"It was a concern for us, I think, because it sorta represented the politicization of PERSI," said Alex Neiwirth with the Idaho Association of Government Employees.

The 33,000 Andreason mentions are retirees receiving payments out of the PERSI fund, which has grown to about $10 billion, according to Don Drum, director of the board. The state is only one of 728 employers with workers paying into the fund. Another large contributing group? K-12 educators.

"We currently, in teachers, we have a little over 18,000 that pay in. The salaries that we're collecting benefits on are $894,819,000 per year," said Drum.

"Payment for state employees is generally 15 to 16 percent lower for the same work in the private sector," said Bob Fick, administrative support manager at the Idaho Labor Department. "Offsetting that is the defined benefit pension plan. That's a plan where you are guaranteed a benefit when you reach retirement age. The benefit is calculated based on your retirement pay. In most companies today, you don't get a guaranteed benefit. In a defined benefit plan, it's guaranteed, and you're going to get that the rest of your life."

There's a significant advantage in a guaranteed-benefit program. Not many businesses can afford to offer such a package. But with the "politicization" of PERSI, that may change.

"We think there's a big battle comin' next year," said Donna Yule of the IPEA.

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