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Monday, Jan. 19, 2009 | 3:57 p.m.
State of the State 2009
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Budget plan
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CARSON CITY – Gov. Jim Gibbons’ budget would take a major toll on more than 8,700 retired state workers.
In his budget, the governor is suggesting the premiums for retired state workers be raised by more than 100 percent.
The governor adopted the recommendations of the Spending and Government Efficiency Commission to cut back existing insurance subsidies for retired state workers by 25 percent in July and by another 25 percent in 2010.
State workers and retirees can’t be certain about how much they will be affected until March, when the state’s insurance system sets its premiums. But Martin Bibb, executive director of the Retired Public Employees of Nevada, says the retired state workers will face a “huge” increase under the governor’s budget. His estimates are that the premiums would be $87 more a month the first year and double that the second year for a single retired employee with 15 years of service, and $400 more a month for coverage of a retiree and spouse.
“It will have a devastating impact,” says Bibb.
Bruce James, chairman of the SAGE Commission, said the state employees now receive a “very generous subsidy” for their insurance coverage. One of the issues here, he said is the state worker who retires before he reaches the age to qualify for Medicare. The state employee continues to be carried on the state insurance and still gets the subsidy. In private industry, the person who retires before qualifying for Medicare has to pay for his own coverage until he becomes eligible for the federal program.
Even if the Legislature adopts the governor’s recommendation, the state will still be paying half of the premium, James said. He said SAGE wanted to come up with a recommendation that is fair to taxpayers and fair to state employees.
Gibbons is recommending eliminating all health insurance subsidies for anyone who retires after next July. And his suggestion would eliminate all subsidies for all workers who are eligible for Medicare coverage.
For a retiree with 15 years service and without Medicare, the state now provides $356 a month and the individual must contribute $131. If the governor’s proposal was in force, the individual would contribute $219 a month next year and $307 a month in fiscal 2011, says Bibb.
A state worker who retired with 15 years of service now pays $452 a month for coverage for himself and a spouse. The state subsidy is $689 a month. Under the governor’s proposal, the out-of-pocket payment would go to $625 the first year and $791 a month the second year.
Those with Medicare coverage receive a $211 subsidy and pay $43 per month. The worker would have to pay the $211 to keep the state insurance. An employee with Medicare now pays $201 a month for coverage for himself and a spouse. That will jump to $604 a month, according to Bibb.
The state started contributing to Medicare for new employees in March 1986.
Bibb says retirees “will have to make a difficult choice. Some people can’t afford this.” He noted the insurance system already cut benefits to save about $50 million.
But Gibbons is budgeting an additional $2.4 million to pay for increased enrollment in the Senior Citizen’s Property Tax Assistance program. The governor did keep the Senior Citizen’s Property Tax Assistance at its present operating level. He has put enough money in the budget to handle the expected growth of 17,146 to 18,777 next fiscal year and 18,859 in fiscal 2011.
There is $12 million budgeted for the program over the coming two years. Participants must be at least 62 years old, not have an income of more than $28,058 and their home must have an assessed value of more than $30,000.
Mike Willden, director of the state Department of Health and Human Services, said the budget provides for a restoration of the grant. The average grant was reduced by $40 this year to help eliminate the deficit in the budget. Willden said the proposed budget restores the average grant to $340, if the number of applicants doesn’t exceed the estimates.
In other senior citizens programs, the governor adds $150,000 to the Home and Community Based Program that keeps seniors in their homes rather than in nursing homes. This is enough to keep an additional 36 seniors in their homes next year and 72 the following fiscal year.
But the governor is reducing the pay to the personal care assistants from $18.50 an hour to $15.50 an hour.
Cy Ryan may be reached at (775) 687 5032 or at cy@lasvegassun.com.
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It's time to impeach this S.O.B.
That is tough.
Most private employees in Nevada get zero money toward health insurance after they retired.
How dare he touch the government workers platinum benefit package?
Why do all the taxpayers work so hard? We do it so that we can give platinum benefits to government workers.
Wow a whole $87 - I wish I could get that deal - sign me up! Oh crap I forgot, I have social security to look forward to.
Where is Buckley's tax and spend plan.
It will be veto proof
30 years of service busting my ass for the state and it's residents and now Jimmy Boy is going to hose me and all my fellow retirees. Thanks for nothing you useless piece of crap.
What do you suggest CCSDteacher? Let's increase taxes, that will solve our budget woes... hey it works for Europe right?
Better to increase taxes for ALL Nevada citizens then to place the WHOLE burden on teachers and other state workers. ALL Nevada citizens share in what this state offers to ALL citizens. Why should state workers be the ONLY ones to pay for them? Nevada state workers were promised these health benefits in lieu of salary increases. If Nevada feels that they can't afford these promised benefits then they should not have promised them in the first place. Now that the promises have come to roost, Gibbons wants to eliminate them by saying, "We can't afford to offer this benefit to state workers." OK.... that's fine for "future" state workers, but don't cut them for those who have worked hard to earn those benefits.
Future2012...
Thank God!
Jimmy boy,
We need to recall you. You are doing what is politically expedient instead of what is good for Nevada in the long term. By nailing state workers with a 6% pay cut, you have in fact raised taxes on them and are protecting your little pacs who are responsible for your getting elected.
As for our retired state workers, you are trashing their decades of hard work and dedication on behalf of our state.
It is time for us to organize a recall campaign.
ARTICLE QUOTE: "A state worker who retired with 15 years of service now pays $452 a month for coverage for himself and a spouse. The state subsidy is $689 a month. Under the governor's proposal, the out-of-pocket payment would go to $625 the first year and $791 a month the second year."
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THE STATE retirement system considers teachers members of a unique catagory of NON-STATE employees. Therefore, teachers pay significantly higher premiums and deductables than state employees & will never have access to social security. Our insurance costs are deducted directly from our PERS checks and what's left is living expenses.
I have just wrapped up my second & final career as a teacher with 18 years teaching + another 4 substitute teaching. As a NON-state retiree- I currently pay nearly $800 a month for my spouse and myself with very high deductables. It is nearly half of my retirement check- yet SAGE and Gov. Gibbons want to consume the rest while leaving all other NV (fed, county & city )government employees, who are often higher paid with more liberal benefits, completely off the hook- yet we are all citizens of Nevada and share in her resources.
It appears SAGE will not be happy until they raise premiums to such a level that nothing will be left of teachers' retirement funds.
This appears to be a discrimatory tax on one group in the guise of a paycut and therefore should be unconstitutional under Nevada statute. Time for a lottery and tax on tobacco and alcohol...time to consider the public good and not the gamer's greed.
No one in the media has yet to report on the distinction and contribution differential between State and NON-state employees such as teachers whose financial burden is much greater. This should be taken into account when SAGE gets out the ray gun!
Make teachers pay into Social Security like the rest of us have to.
I am a retired Nevada state employee. I also worked for private industry sufficient time to earn social security. My social security, however, has been reduced by 5/9ths BECAUSE I receive a pension from the State of Nevada. The implication in some of the comments to this article is that state employees don't work as hard as the rest of the world. Having been on both sides, believe me state employees work just as hard as do private industry staff. Staff shortages are putting extra burdens on existing employees and many are doing "double duty". As for teachers, I know it is "unpopular" to say anthing, but they did not pay into the medical benefits system, and did not take a reduced salary to offset that payment. Teachers also have collective bargaining, a benefit denied state employees each and every time it was introduced. The cut state employees will take will be just that, a cut. Teachers do have the option of going back to the table to negotiate for a better salary package; often they receive the same pay raises as state employees PLUS a negotiated raise under collective bargaining. As for the potential increases in medical premiums for retirees, many of these individuals have been retired for a number of years and are not receiving pensions at a high enough nominal amount to pay increased premiums. It is one thing to plan your retirment knowing you will have to make large contributions for medical insurance premiums, it is another to be retired, have a fixed income, and THEN be hit with high medical premiums. Many will simply no longer have medical insurance if this recommendation is implemented -- then who will take care of them as indigents -- well, I guess it will be the taxpayers!