Former state workers paid not to work


by ANDY PIERROTTI / KVUE News and Photojournalist ROBERT McMURREY

Bio | Email | Follow: @AndyP_KVUE

Posted on September 18, 2012 at 10:28 PM

Updated Wednesday, Sep 19 at 11:55 AM

AUSTIN -- A KVUE Defenders investigation finds millions of your tax dollars paying for state employee vacation time after they retire or quit.

According to state financial records, more than 43,000 state employees got these checks over the past two and a half years, totaling $160 million.

A former Texas Department of Transportation executive was paid nearly $70,000. A former Health and Human Services executive received a $76,000 check and a former executive with the Teacher Retirement System received a $94,000. All three were well paid before retirement. One of them earned more than $300,000 a year.

“This is something I would have never had been able to acquire in the private sector,” argued State Representative Jason Isaac, a Republican in Dripping Springs.

After reviewing what the state pays in unused vacation time, he now plans to draft legislation that could reduce that cost. Isaac’s proposed changes would impact only future employees, not current ones.

According to a 2010 human resource survey, only 20 percent of private sector companies allow employees to cash unused vacation hours. In most cases, employees use it or lose it.

“My philosophy has been you get paid for the work you do, not for the work that you don’t,” said Isaac.

“To be honest, these are people who have earned these benefits,” contended Executive Director for the Texas Public Employees Association Gary Anderson.

Anderson says state employees typically make 17 percent less than those in the private sector. He also argues not every state worker can take all of the vacation they earn. The average vacation time payout is $3,800 upon leaving the state.

“These people are so understaffed that they can’t even take the time they’ve accumulated because they’d be too short-staffed to be able to do the service that is required of them,” Anderson said.

State employees aren’t the only ones benefiting from this cash-out option. During a similar time period, the City of Austin paid  $7 million; Travis County dished-out $1.6 million and Williamson County paid $464,000.

While each government sets different limits of hours employees can cash-in, all are paid at the rate they earned at retirement, which is typically their highest hourly salary.

“In terms of fairness, that’s just the cost of choosing this particular type of compensation system,” says Kristie Loescher, a professor with the University of Texas' McCombs School of Business.

She says state government likely saves money providing these cash-out options. “Would you save some? Maybe. Then, you’d have to look at paying everybody more, and that may actually cost more,” said Loescher.

Isaac isn’t necessarily opposed to paying state employees more. “I’m not sure it would cost more because we’d have better quality people, and I really think we’d be more efficient,” she said.

The Public Employee Association says the state’s population has increased 20 percent over the past 20 years, but state hiring has remained nearly the same.

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