State employees’ prospects shine a little brighter with buyout, bonus

House members got their first look at the details of a buyout package that would trim 2,000 state workers from the budget. Matthew Williams/The City Paper

State employees, receiving the brunt of many budgetary cutbacks, saw some signs of relief Monday as previously skeptical lawmakers appeared pleased with the details of a voluntary buyout package and a plan for a one-time bonus.

In addition, state workers may be helped through retirement plans that look to stay unchanged as well as any layoffs being delayed until after Jan. 1.

Lawmakers in both the House and Senate hope to approve next year’s budget today and adjourn the 105th General Assembly.

To contribute toward cutting $468 million from that budget, Bredesen has been forced to trim proposed pay raises, health insurance benefits as well as 2,011 state workers’ jobs.

As opposed to layoffs, Bredesen wants to entice those employees to leave through voluntary buyouts, a $50 million overall package.

Last week, lawmakers, many of whom are House Democrats, vigorously objected to the lack of details on the buyout package. The legislative session was extended to this week partially as a result.

Monday, the Bredesen administration furnished House members with written details of that buyout offer, which appeared to sway some lawmakers, particularly from the Nashville area, who were clamoring for additional specifics.

“This is much better,” said Rep. Mike Turner (D-Old Hickory). “This is a good package. And if everybody takes it, then we don’t have a problem.”

As a result, Turner said he would abandon his move to use up to $100 million of the state’s $750 million rainy day fund to prevent any employees from being laid off.

An employee taking Bredesen’s buyout offer would receive cash payments equal to four-months salary, $500 for each year of service plus money for any unused annual leave or compensatory time. In addition, health insurance could be maintained and tuition assistance will be offered.

Rep. Rob Briley (D-Nashville) said the Bredesen administration went “beyond the concerns that I raised last week” but warned any employee layoffs would be felt “disproportionately in Nashville.”

“A lot of these employees are going to be here in Nashville,” Briley said to the House Finance Committee. “And I want everybody on this committee to think about an employer in your district laying off 2,000 people, how that’s going to affect the economy in your district.”

Zoyle Jones, the president of the Tennessee State Employees Association, called the buyout package a “generous one” but said the state workers’ organization still has “reservations about the buyout process.”

House Democrats have persuaded the Bredesen administration not to lay off any employees until at least Jan. 1, 2009. Those layoffs would be unnecessary if enough employees take the buyout.

Besides the buyout package, House Democrats are pursuing offering remaining state employees, higher education officials and K-12 teachers a $400 bonus to help with the increasing cost of living. The $400, one-time payment will cost around $48 million and would come from reserve funds.

House Speaker Jimmy Naifeh (D-Covington) said Bredesen knows the bonus is a “legislative initiative” but the governor is not necessarily for it.

On the Senate Republican side, who have operational control of the chamber, Sen. Randy McNally (R-Oak Ridge), the chairman of the Finance Committee, said he can support the bonus.

“I don’t like dipping into reserves, but at the same time, we’re not giving our state employees a raise, we’re increasing the costs of their health insurance, we’re increasing their deductible,” McNally said. “And I feel like that a one-time for state employees and teachers would be something I could support.”

In addition to a one-time bonus, there appears to be bipartisan agreement to maintain the state’s matching $50 monthly payment for workers’ 401(k)s, which costs $4.6 million. If the Legislature doesn’t appropriate the money for the 401(k)s, the state’s matching contribution would be reduced to $40 per month.

“We’re going to keep that $10 there,” Naifeh said of maintaining the state’s contribution, “because if we didn’t that would be taking even more away from state employees.”

The details of the buyout package include the following:

CASH PAYMENTS: Eligible workers electing to take the buyout will receive a one-time, base payment equal to four months salary. Also, a $500 service payment is offered for each year of employment. Eligible employees will receive their accrued and unused annual leave as well as compensatory time

HEALTH INSURANCE: The state will pay for six months of a bought out employee’s health insurance at the same rates. Employees can receive an additional 12 months under COBRA, but would have to pay all of it themselves.

COLLEGE TUITION: The state is offering two years of tuition for public community colleges or state universities. The average cost is estimated to be $7,122.

In a hypothetical situation demonstrating the most money paid, a state employee with 31 to 35 years of service making $46,681 a year would receive $35,060 in cash payments and $11,072 split between health insurance and tuition. That overall would be a buyout package worth $46, 132.

The Bredesen administration is planning on mailing the buyout offers June 5.