Unintended (?) Consequences
One of the centerpieces of Governor Carcieri’s deficit-reduction plan has been a reduction in the state workforce. Last year, in order to provide an incentive for employees to retire early, the state changed its retirement health benefits: workers who retire before September 30 will retain the generous current benefit:
Until recently, Rhode Island was one of 11 states that paid 100 percent of medical benefits for most employees who retire with the required years of service before age 65, according to the National Conference of State Legislatures.
But this spring, the Rhode Island legislature voted to scale back retiree benefits to try and staunch a growing budget deficit and bring the plans more in line with private industry.
Workers who retire after tomorrow will not only pay more for their medical coverage, they must wait until age 59 to qualify. Currently, there is no age requirement if the years of service have been completed.
I think there’s a legitimate argument to be had over whether or not Rhode Island’s retirement benefits were “too generous” or whether they were designed to entice well-qualified people into public service, and there’s a legitimate argument over whether the new benefits are “too stingy” or whether they’re a realistic concession in a time of fiscal strain. But leaving aside the specific issue of retirement health benefits, what is the effect of trying to significantly reduce the number of employees on the public payroll?
Thus far in 2008, 1,259 of the state’s roughly 14,000 employees have announced their departures, close to four times the number that did so between January and September of last year, according to the state treasurer’s office, which oversees the retirement board.
Some in state government predict that number could substantially increase by tomorrow’s deadline.
The exodus prompts questions about what happens to the departments and units left with gaping holes in their staffs.
Unlike other years when the governor has simply replaced those who have retired, this year the administration says it is “not certain” how many of those jobs it can refill given the leftover $33.6-million state deficit and the national financial crisis.
Employees across state departments say exhaustion, low moral[e] and panic is setting in.
Well, that’s not so good. When you create incentives for your most senior employees to retire, you should expect that the ability of state government to provide services and function effectively may be impaired.
But don’t worry! Governor Carcieri has a plan:
The state has also enlisted Textron and Johnson & Wales University to educate senior staff about the business model known as Six Sigma, which helps identify priorities and how to do more with less.
God help us.
Popularity: 12% [?]
