Where I Stand — Mike O’Callaghan: It could have cost more

Tuesday, Feb. 15, 2000 | 9:08 a.m.

Mike O'Callaghan is the Las Vegas Sun executive editor.

When dissenting in the recent Nevada Supreme Court's 4-2 ruling to allow two former assemblymen to benefit from the later repealed 300 percent increase of retirement benefits passed in Assembly Bill 820 in 1989, Justice Cliff Young, a former congressman and later state senator, wrote:

"However, the Contract Clause is inapplicable in this case because Nicholas and Craddock did not obtain vested contract rights to the additional benefits provided by AB820. Nicholas' and Craddock's contract rights vested before AB820, not after its passage. Consequently, I conclude that Nicholas' and Craddock's vested rights are restricted to the pre-AB820 retirement benefit rates.

"Additionally, it is important to note that Nicholas and Craddock made a calculated effort to exploit the passage of AB820. At the time the Legislature enacted AB820, Nicholas was a paid lobbyist in the Nevada Legislature and actually attended hearings on AB820. Nicholas also discussed the bill with State Sen. Donald Mello, the moving force behind the benefit increase. Nicholas and Craddock carefully timed the filing of their retirement papers in their quest for an unwarranted windfall. Addressing Craddock's claim in the Eighth Judicial District Court, Judge Gerard Bongiovanni succinctly noted, 'Calculated reliance is not detrimental reliance.'

"Under AB820, this windfall amounts to an extra $863.27 a month for Nicholas and an extra $1,018.98 a month for Craddock for the rest of their lives. Over 25 years, Nicholas and Craddock would jointly receive an impressive $564,675 over what they would have received at the pre-AB820 retirement rate."

The other dissenter, Justice William Maupin, wrote:

"The Legislature enacted former AB820 after appellants' public service as legislators was concluded. They may not, as a matter of law, claim to have relied upon the pension increase as a condition of their respective public services.

"It is reliance that gives life to the doctrine that is most eloquently articulated by the majority opinion. This completely unique situation does not implicate that doctrine. The Legislature intended to void the pension increase in its entirety and appellants lost nothing in the process.

"I further agree with Justice Young that no constitutional violation of appellants' vested rights occurred."

Since that decision was handed down, George Pyne, executive officer of the Public Employees Retirement System of Nevada revealed the decision in favor of the two former assemblymen will cost taxpayers another $70,000 to keep the system's fund stable. He figures that the two legislators will be getting somewhere between $350,000 and $450,000 in back pay, and neither has served for the past 12 years.

Sun reporter Cy Ryan explained to our readers:

"The pension fund for legislators has $4.8 million in assets, and the state kicks in $166,000 a year to help support the system.

"The court ruling adds another $70,000 a year to maintain the pension program, Pyne told the Legislative Committee on Interim Retirement and Benefits.

"Lawmakers now pay 15 percent of their salaries into the pension plan in addition to the state's contribution."

Both the state employees and the taxpayers feel the Supreme Court has made them victims of the 1989 money grab of the Legislature. Believe me, it could have been worse. AB820, voted for by every member of the Assembly, if not later repealed, could have cost Nevada taxpayers $750,000 yearly. It zipped out of the Assembly Ways and Means Committee without discussion. Those legislators working five or six months every other year would have, after 30 years, been taking home $36,000 a year for retirement. Much better than the retirement checks paid to full-time employees who work around the year every year.

Gov. Bob Miller saw the rip-off for what it was and vetoed AB820. His veto was overridden in a matter of minutes. Within weeks the legislators were whining about the public reaction and asked the governor to call a special session to repeal it. He did and it took them 133 minutes in early November to get their self-made monkey off their backs. In the interim, several legislators retired in hopes of getting the big bucks but failed. Craddock and Nicholas, no longer in the Legislature, jumped in and "retired."

Nevadans can be thankful for the courage of Gov. Miller and several past court decisions that winnowed the money seekers down to two. It could have been much worse and an even bigger drain on the taxpayers and state employees.