State buyouts would include cash, insurance and tuition
By BETH RUCKER
Associated Press Writer
NASHVILLE (AP) — State employees who volunteer for buyouts designed to cut about 2,000 jobs could be eligible for incentives worth between $23,000 and $47,000.
State Finance Commissioner Dave Goetz presented details of the incentives packages Monday in a House Finance Committee hearing. The buyout proposal from Gov. Phil Bredesen is meant to save about $64 million amid a shortfall in the coming budget year that’s approaching a half-billion dollars.
“This represents our best thoughts so far on how the voluntary buyout, voluntary separation plan can be carried forward. This is a work in progress,” Goetz said.
The buyouts are part of a state budget that includes $468 million in cuts. After some changes were negotiated with Bredesen, the budget bill was approved by both the House and Senate finance committees and is expected to be voted on by both chambers on Tuesday.
The buyouts would include cash incentives based on an employee’s length of service, 18 months of health insurance benefits and two years of tuition to a state community college or university.
The plan is expected to cost the state roughly $50 million.
The House last week delayed approving the state budget because several Democratic lawmakers were concerned they didn’t know enough about how the buyouts will work.
But many lawmakers at Monday’s committee session said they felt more comfortable after House Democratic leaders met with state Comptroller John Morgan and Treasurer Dale Sims over the weekend to hash out details of the plan. The meetings were not announced to the public, and the Legislature is exempt from state Sunshine Laws requiring government bodies to meet in public.
“I personally think that a buyout is going to achieve what we want it to as far as those employees — and the key word is voluntary — who want to voluntarily retire from state government,” said House Speaker Jimmy Naifeh, D-Covington, who attended the secret weekend meetings.
Administration officials want to have the buyouts wrapped up by Aug. 1 and had expected to begin any necessary layoffs a few days later, but one of the proposals to come out of the weekend meetings was to delay any layoffs until at least Jan. 1.
Those discussions also led to a proposal to offer a one-time $400 payment to state employees in lieu of a pay raise. Naifeh said the payments would be funded out of state reserves.
“What it amounts to is a one-time assistance in the immediate cost-of-living increase we feel our state employees have,” House Finance Chairman Craig Fitzhugh, D-Ripley, said.
Another proposal to come out of the meetings was one to maintain the state’s matching dollars for employees’ 401(k) retirement program.
House leaders met Monday morning with the governor to present their ideas.
Bredesen spokeswoman Lydia Lenker said the administration wasn’t going to stand in the way of the legislative proposals, including the $400 payment to all state employees.
“That was not part of the governor’s budget proposal, but there’s a clear legislative desire to do this, and we’re not going to stand in the way,” she said.
Senate Finance Chairman Randy McNally, R-Oak Ridge, said he personally could support the House Democrats’ proposals.
“In my thinking, the 401(k) would be important. I don’t like dipping into reserve, but at the same time we’re not giving state employees a raise,” McNally said.
Goetz said finance officials and Segal Co., a consulting firm helping to devise the buyout plan, expected that most employees interested in the buyouts would be those who had either worked for the state less than 10 years or were nearing retirement.
Rep. Mike Turner, an Old Hickory Democrat who last week said he wanted to use $100 million from the state reserves to delay any layoffs, said he was more comfortable with the buyout proposals this week as long as enough employees accepted them to prevent layoffs.
“I think this buyout package is actually pretty generous,” he said.
Tennessee State Employees Association President Zoyle Jones said the plan was generous and was glad that any layoffs would be delayed until January. But “TSEA still has reservations about the buyout selection process,” he said.
Associated Press Writer Lucas L. Johnson II contributed to this story.
Published in The Messenger 5.20.08