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Taxpayers spend thousands to increase retirement benefits for city, county employees

Taxpayers spend thousands to increase retirement benefits for city, county employees

April 7, 2010
April 7, 2010

In the last decade, Idaho taxpayers have shelled out $283,000 to boost the monthly retirement benefits of at least 10 city and county government employees. According to records from the Public Employee Retirement System, taxpayers in Ketchum, Rathdrum, St. Anthony, Canyon County and Nez Perce County, paid to purchase "service time" for employees.

Under Idaho law, government employee retirement benefits are calculated using a formula that takes into account the employee's wages and length of public service. Sometimes, employees boost their retirement pay by buying service time. But government agencies, occasionally, make the purchase themselves.

The practice came to light in 2009 after the state spent almost $73,000 to buy additional service time for the director of the Division of Human Resources, allowing her to retire eight months early. That disclosure led to revelations that the state Tax Commission spent $13,500 to boost the retirement for an employee who had been fired and the Department of Education spent $42,000 to let a laid off employee retire rather than be laid off. Employees at the State Historical Society and Department of Lands also received special consideration with retirement boosts at taxpayer expense.

Addressing the issue last session, the Legislature passed House Bill 604, to prohibit state government agencies from purchasing time for employees. The bill did not address local government.

“We may need to come back next year and make it clear that law applies also to cities and counties, not just state government,” said Rep. Steve Hartgen, R-Twin Falls, a member of the House Commerce and Human Resources Committee. “It seems to me the intent is pretty clear, that no employee of state government should receive severance pay as a way of sweeping their exit from state employment.”

But supporters of the practice say it can help save taxpayers money. Canyon County officials used that explanation in February 2009 when commissioners voted to spend $196,000 to help six sheriffs deputies retire early.

The county said holding those six positions open and unfilled for two years would save the county $296,000. More savings would come from the use of fewer patrol cars, with their associated gas and maintenance, and possibly replacing the full-time deputies with part-time deputies who would not be paid benefits, the commissioners said, according to meeting minutes.

But critics say the practice is arbitrary because some retiring employees receive the benefit while others do not. And, while ongoing employee pay decisions can always be reviewed and adjusted, a one-time lump sum payment to a government employee's retirement calculation is final and can never be revisited.

“The intention of the bill was to be inclusive,” said Rep. Anne Pasley-Stuart, D-Boise, one of the sponsors of House Bill 604, which passed the Legislature unanimously and was signed by the governor March 31. “It’s ridiculous to have cities and counties buying people out.”

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