TRENTON, N.J. (AP) – State legislators are questioning Gov. Jon S. Corzine’s plan to offer early retirement incentives to state workers to try to save money, worried that the offer sends a wrong message and could prove costly.
“That’s the exact opposite direction I thought we were going in,” Barbara Buono, Senate Budget Chairwoman, D-Middlesex, said.
Corzine hopes to cut at least 3,000 state jobs through a combination of early retirement incentives and layoffs. The state has about 68,000 executive branch workers, with about 8,000 eligible for retirement.
The layoffs are designed to save $136 million and are part of $2.7 billion in budget cuts sought by Corzine to try to fix troubled state finances.
It’s uncertain which state workers would be offered retirement incentives, but legislators are worried the plan would save money now but prove pricey in later years.
In 2002, about 4,000 workers took an early retirement package under then-Gov. James E. McGreevey.
According to legislative staff, the state has saved $314 million in the four years since then, but has seen its taxpayer-funded pension liability increased by $645.4 million, for a net loss of $331.4 million.
Corzine said his early retirement package would be different because it would include a state law allowing only one in 10 of the vacated jobs from being refilled.
“All of the employees who will be included in the early retirement program are currently eligible,” Corzine said. “We are simply giving those who can an incentive to do so.”
Though layoffs are also planned, Corzine said early retirements “will allow us to shrink the size of government without creating the chaos under the civil services rules” that would accompany across-the-board layoffs.
“The effect of these personnel reductions will create future savings as our departments are forced to reprioritize their programs and activities,” Corzine added. “They will not only have to do more with less. They’ll undoubtedly have to do less.”
Buono, though, questioned boosting the state pension liability. The state’s pension fund already has a $25 billion deficit.
“This is inconsistent with the philosophy behind the budget, I think,” Buono said.
Senate Majority Leader Stephen Sweeney, D-Gloucester, said the public wouldn’t support cutting state aid for municipalities, as Corzine has proposed, while enticing state workers to retire early.
“I don’t think the public is really excited about that, nor should they be supportive,” he said.
Assemblyman Joe Malone, R-Burlington, said the state should just not fill the 6,000 jobs that, on average, become vacant annually through retirement or resignation.
“The evidence is overwhelming that these early retirement programs substantially burden our pension system and they end up costing the state significantly,” Malone said. “If the state is already going to lose more than 6,000 employees this year, we should consider not filling those vacancies and shifting personnel where necessary.”
Corzine, though, called his proposal “an economically sound step. The savings that we will get by reducing the work force and not hiring it back, which we’re going to put a limitation on, is the only way that you will eat away – over the long run – your unfunded pension liability,” Corzine said.
Other lawmakers are wary of the layoffs.
“While I understand that government is going to be required to do more with less, I cannot support draconian layoffs which will only serve to move people off the state payroll and into welfare,” Sen. Shirley Turner, D-Mercer, said.