Commission urges cuts in benefits to state workers

Tuesday, Dec. 30, 2008 | 6:53 p.m.

Lawmakers take aim at state employee retirement benefits (12-15-2008)

Archive of politics coverage

CARSON CITY – A state efficiency commission is recommending major cutbacks in the insurance and retirement programs for state workers and retirees that could save more than $50 million next fiscal year and $614 million over five years.

The Nevada Spending and Government Efficiency Commission said in a new report that the salaries paid to state workers are similar to equivalent positions in the private sector. Commission Chairman Bruce James said, however, that the insurance and retirement benefits offered to state employees “exceeded the Nevada private sector and most other states by a wide margin.”

The report was the second presented to Gov. Jim Gibbons, who is looking for ways to balance the state’s budget with sinking revenues.

“All of our commissioners expressed concern about the impact our recommendations would have but agreed that the state could not longer afford to offer such generous benefits,” said James in his letter to the governor.

Dennis Mallory, chief of staff for the American Federation of State, County and Municipal Employees Local 4041, said many of the recommendations were the same as those proposed earlier this year by the Las Vegas Chamber of Commerce. He said he did not see any appetite in the Legislature to adopt these “drastic” proposals.

Mallory said the benefits of state workers in Nevada were comparable with those in other states and lower than the benefits enjoyed by workers in the cities of Las Vegas and Reno.

This commission and the Las Vegas chamber are doing everything possible to avoid a tax increase, Mallory said. And the commission itself was inefficient, flying around the state and coming up with the “same old recommendations” that have been advanced for 15 years.

One major recommendation is to reduce the subsidies for health insurance the state provides its 26,000 active state workers and their dependents. It found that the average monthly premium for health insurance paid by workers runs between zero and $28 and between $62 and $194 for dependent coverage for a family of four.

The commission said a private sector Las Vegas employee will pay between $104 and $323 for approximately the same insurance. The subsidies to state employees should be reduced 5 percent in each of the next two years to soften the impact.

This recommendation is estimated to save $20.2 million in the first year and $322.7 million over five years.

The commission is recommending the state eliminate all health insurance subsidies for anyone who retires after next July 1. And it also wants to cut back on the existing subsidies for an estimated 8,700 current retired state workers by 25 percent next July and by another 25 percent in 2010. The panel recommends eliminating all subsidies for workers who are eligible for Medicare coverage.

This would save $23.6 million in one year and $156.8 million over five years for the state.

The commission suggests that $100 million could be saved over the next five years by cutting back on retirement benefits. For instance, it recommends eliminating the option to retire at any age with a prescribed number of years of service. It says a minimum retirement age should be 60. And there would be a reduced benefit paid to a person who retires at any age after 35 years of service.

There’s a suggestions that a moratorium be imposed in increasing benefits yearly in the retirement system until it is fully funded for three consecutive years. The cost of fully funding the system is estimated at $6.3 billion.

The commission said the retirement benefits given police and firemen should be studied separately. The Public Employees Retirement System covers all government workers in Nevada.

The commission is recommending that state agencies charge more for some services they supply to the public. That would produce $1 million in the first year and $5 million in five years.

For instance the state’s Consumer Health Protection Unit provides such services as X-ray machines, restaurant inspections and oversight of solid waste disposal. This agency is now getting $1 million in state general fund and is collecting $1.6 million for its services. SAGE said, “Therefore the general public is funding over a third of the cost of services provided to a specific segment of the community.”

It also suggests shifting the Senior Citizens Property Tax Assistance Program to the counties that collect the property tax that finances this program. That would save $30 million over five years. And county representatives have already said they oppose this plan.

And the commission is suggesting a “Sunset Commission to periodically review the programs and state agencies to see if they are serving the purpose for which they were created.

Mallory sees a major battle in the Legislature with people lining the halls to push and oppose these programs.

Cy Ryan may be reached at (775) 687 5032 or cy@lasvegassun.com.

Discussion: 12 comments so far…

By doogie

12/30/08 at 9:18 p.m.

Suggest removal

It will be exciting to see state workers energized to keep their pay and benefits during the legislative session to follow, especially since energized is not a word usually associated with state employees. But let's face it-the city workers-especially in Henderson-are the problem. 300 cops, God knows how many fire employees-in a docile, low rise community. Overpaid, underworked, and cocky as hell, due to their unions. It's time the homeowners step up, and demand changes. Our local taxes are rising exponentially, and something must be done. Now....
By RobertD

12/30/08 at 9:32 p.m.

Comment removed by staff.
By MysterMr

12/30/08 at 11:45 p.m.

Suggest removal

RobertD, let's say that they have been helpful. Fact is, the state is broke, and just about every single government employee in this state is overpaid (legislators actually are the exception here). I'm sure every tradesman you encounter would be "helpful" if you paid them 4x what their job was worth - then paid for 3/4 of their insurance, then kept paying them 70% of their pay even after they retired. (and I really would like to know what workers you've found especially "helpful" since I can't name any experience off the top of my head).

I've watched my taxes go literally through the roof while I've watched double-digit percentage increases in the pay of city workers - and show me ONE other business that can afford to pay 70% of someone's wages after 25 years with nothing paid in... wha? well the auto industry, and we see how well that is working for them.

RobertD, I can only assume that you're a state government worker - or benefit directly from one. Even the (other) mafia wasn't so greedy. Do you really have the gall to insinuate that it is perfectly fine for the working people of this state to foot the bill for this dead weight? How insulting is it to someone that works two jobs to make 1/2 of what these "people" get after they retire for doing NOTHING WHATSOEVER.

I don't blame the state employees. While many if not most couldn't cut it in the public sector, they are only taking advantage of a stupidly lucrative opportunity.

- M
By renomuse

12/31/08 at 5:31 a.m.

Suggest removal

OK. Let's see. Who is on this commission? A combination of Gibbons butthuggers and corporate wh*r*s, all who will benefit from the trashing of government employees' benefits in order to justify the trashing of private sector employees' benefits. You people here are idiots, sitting here trashing the anonymous government employee. I can't wait till all of you start losing your shorts in this downturn. You may never get them back.
By pmmart

12/31/08 at 7:06 a.m.

Suggest removal

I agree with the idea that state employees should pick up a larger portion of their taxpayer subsidized health care ... a tactic that has been a big business favorite money saver and the quickest budget partial "fix" for Nevada.

That said ... I always ask the union basher/ anti-state worker posters why , if they resent these well-to-do shirkers so much, they don't apply for one of the many positions in the state that are available every year.

AHHH ..I love the sound of crickets chirping.
By manfred

12/31/08 at 7:09 a.m.

Suggest removal

The article contains the following statement: "The panel recommends eliminating all subsidies for workers who are eligible for Medicare coverage." This would be illegal for the State to do and potentially raise EEO issues. Under Medicare law, the State must offer Medicare eligible workers the same health benefits under the same conditions as non-Medicare eligible workers. If they do not they could be subject to severe penalties. For reference see 42 USC 1395y(b) or go to the website for the centers for medicare and medicare services and look under Medicare Secondary Payer. Under the recent Erie County EEO decision, the State may force RETIREES into Medicare and treat Medicare Eligible RETIREES differently, BUT NOT ACTIVE WORKERS!
By pbatour

12/31/08 at 12:45 p.m.

Suggest removal

I'm a retried state worker with 22 years of service. I recieve $3800 per month plus a yearly cola raise of at least 2%. Also, I get full medical, dential and vison for my wife and I, that's worth about $1200 per month. At age 62 or 66 I will get social security (ss). Total retirement? Not much, a package currently worth around $5,000 per month - plus a little boost with ss at age 62 or 66. Compare to the private sector, it really is not much at all.
By billm

12/31/08 at 11:16 p.m.

Suggest removal

gee you really have to feel sorry for some poor state employee having to get by on $5,000.00 per month or $60,000.00 per year.it must be really rough to live on that small amount of money.in the future so we don't have more state employees having to scrape by on $60,000.00 per year here is a suggestion,just reduce the retirement benefits to say 1/2 of what they are now.that way the workers can see how the rest of us get through life everyday on 30 k per year.i'm so tired of hearing these state,municipal and federal employees complain about their lives.they sat on their asses for 20 years and took an unheard of number of days off including using most of their sick days,way too many allowed plus their damn personnel days at taxpayer expense and now they want to bitch.most could not hack it in the private sector,most would have been fired for goofing off on the internet on gov't time.give me a break and shut up and go get a real job for once in your sorry lives,just stop the whining,please.
By narkcop

1/1/09 at 12:18 a.m.

Suggest removal

What bunch of delusional horse-pucky!! The nay-sayers-against-public-employees are jealous that someone actually can make a more livable wage than some private sector workers. On the other hand, the unions that represent state workers are blatantly incompetent. There remains a total disconnect between the union leadership and actual membership. Like all good capitalists, the union leadership sells out the line staff, so that they don't have to fight the fight. Collective bargaining was a done deal until our swell turkeys at SNEAZEA-AFSCUMIE Local 4041 decided that suing Gov Muuller was such a fantastical act of utter brilliance. Then, in 1996, Gov Miller had non-economic collective bargaining on the table, and AFSCUMMIE ditched it because it wasn't "their bill." Thanks a lot you sore losers.

But back to reality and the farce. Even with changes in political demographics, the money will always side with the right until someone forcefully takes what "they" deem as theirs.

The fact is that both political sides in this debate have royally bankrolled the state. In 200 years, Jefferson's 20-year revolution has never taken place because it's all about the cold hard cash.

Wanna change the system? Well, better jump on the publicly financed campaign. Take the money out of the game. It's like that phone commercial with the firefighters running the legislature, everyone wants roads, police, and etc., but who's got the jewels to finally put the moneyball out of reach. After 200 years, no one does.
By Wolfdog

1/1/09 at 8:18 a.m.

Suggest removal

State worker, should be willing to take a pay cut. If not the state should default of it debts. And fire them all.
By sickntired

1/1/09 at 12:10 p.m.

Comment removed by staff.
By sickntired

1/2/09 at 7:09 a.m.

Suggest removal

It figures.......you removed my comments because they were the truth...how sad for the Sun .... I will repeat it again...