December 7, 2008
Totally Separate Stories. Totally.
Here's a mild head-shaker of a story on page A12 of today's Providence Journal:
... when he retired in June at the age of 75, the [Rhode Island College] gave [former President John] Nazarian something back: a $205,008 severance check.The check included $67,890 for unused vacation time, $31,366 for unused sick time and $29,902 in deferred pay from the 1991 budget crisis that was belatedly paid to him based on the $189,625 a year he was making when he retired 17 years later.
It also included a $75,850 "retirement incentive."
While the University of Rhode Island offered its workers a $20,000 incentive to retire, RIC and the Community College of Rhode Island offered their employees 40 percent of their pay to leave before the end of June, a decision that provided tens of thousands of extra dollars to dozens of their highest paid professors and administrators. ...
Overall, 90 employees in the state college and university system received a total of $2.3 million in incentives, ranging from $13,870 to the $75,850 paid to Nazarian. The college and university employees were among 1,521 state workers who retired between May 1 and Sept. 30 as part of an effort to cut the state payroll.
All told, the state paid out $18.8 million to the retirees, including unused sick and vacation time and other payments. ...
Asked why URI bumped its retirement incentive from $7,000 to $20,000 last spring — and why RIC would offer a $75,850 retirement incentive to a 75-year-old — Steven Maurano, a spokesman for the state Office of Higher Education, said the decisions were made before the state slid into its current budget crisis.
And from the front page of the Local News section:
Bracing for deeper budget cuts, higher education officials are considering a range of cost-saving measures at the state's three public colleges — from eliminating dozens of small academic programs to consolidating some redundant programs to reducing the number of credits needed to earn a degree.They also warn that increases in tuition and fees for next year will probably double. Students at the University of Rhode Island, Rhode Island College and Community College of Rhode Island will most likely see increases of 20 percent to 25 percent, or even higher.
"We need to have an ongoing analysis of how we can reduce costs," said Jack Warner, the state's higher education commissioner.
See, the thing is, when those kids chose Rhode Island institutes of higher learning — often uprooting their lives to do so — their decisions were also made before the state slid into its current budget crisis. Former director of institutional research at RIC, Donna Konicki, says that she understands "why taxpayers might be upset with the amount of sick time we are allowed to accrue," bringing her total severance package to $88,223, but perhaps the students deserve an explanation, too, justifying the translation of retirement largesse into further education loan payments by the new indentured servant class.
ADDENDUM:
While on this topic, I've got to point out a great line from a related article addressing the sick-time payments more broadly:
The president of the largest state employees union, J. Michael Downey, said the payments for unused sick time are also one of the benefits given state employees to compensate them for getting paid less "historically" than their private-sector counterparts.
In this case, "historically" is meant to be understood as "at some point in history." Of course, there are plenty of examples in which RI unions exhibit a strange sense of fairness, including this argument:
Defenders of the payouts for unused sick time say the policy gives state workers — who are not covered by temporary disability insurance — an opportunity to "bank" blocks of time so they can be paid in full if they are out of work with illness for an extended period.
Hey, that's reasonable... as long as I someday am able to recoup a portion of the $707 dollars taken from my paycheck every year for a program that I may never use.
" Former director of institutional research at RIC, Donna Konicki, says that she understands "why taxpayers might be upset with the amount of sick time we are allowed to accrue," bringing her total severance package to $88,223"
'Cause, see, that's $88,000 that won't go to Haliburton or that unjust war.
... though isn't it federal taxes that fund Haliburton and Iraq? And it looks like kids' tuitions are going up quite a bit in state ...
Oh well. I'm sure it's fair on some plane.
Posted by: Monique at December 7, 2008 2:47 PMYeah, the plane headed toward a Florida retirement community...
Posted by: Justin Katz at December 7, 2008 2:52 PMJustin,
This is not just a State employee only benefit.
This is State of RI law applicable to anyone working in the State of RI.
You might be able to get your $707 back some day.
State of RI Law:
http://www.rilin.state.ri.us/Statutes/TITLE28/28-14/28-14-4.HTM
Ken,
As somebody just given the option of taking a 14% pay cut or quitting, I've spent some time sifting through labor laws. Your cite bears on vacation time; that's it. Not sick time. Not incentive pay. It also doesn't say how much vacation ought to be carried over from year to year.
And it most definitely has no relevance to the state's mandated TDI tax on working Rhode Islanders.
Posted by: Justin Katz at December 7, 2008 6:46 PMWell Justin, all the different private companies I worked for in RI must be interpreting the State of RI law wrong because I’ve been paid accrued sick, vacation and personal time when I’ve left to change jobs.
When you work for a company you must read employees benefits fine print, don’t you read the employee handbook of benefits or your contract?
RI TDI tax is a separate case. I didn’t know the general RI workforce can collect TDI when out of work but State of RI employee can not collect!
Besides, what do I care, I’ve retired early and spending my days on the sunny warm beach waiting till I turn old enough to collect social security and join the rowdy silver-haired crowd.
And for my pal Andrew, all these gifts bestowed to these hard working souls (they must work hard 'cuz they never take vacation or sick days, right?) will factor into their Defined Benefit Pension payments for the rest of their miserable lives.
Had they appropriately been in 401k style plans, these gifts would not result in life-time annuity payments.
Factor that into your undying support of the nut-bag GUARANTEED Defined Benefit Pension Plans that the hard working Taxpayers must shoulder year in and year out.
And Justin - with respect to your 14% pay-cut ...I guess your employer didn't receive the memo from Ed Davis explaining that they'll lose good employees unless salaries ALWAYS go up! My guess is that, like the rest of us (sans Teachers), you'll swallow hard and take the pay-cut, while being thankful that you are lucky enough to have a job in this economy. Good luck and hang in there.
But please make sure you've tucked a few dollars away to pay your taxes, as our Public Employees who have retired are schedule for an automatic 3% increase in their benefits come January. I know that may seem unfair, but perhaps Andrew can help justify this apparent injustice.
Posted by: George Elbow at December 7, 2008 8:12 PMJustin,
You took a 14% pay cut to stay on the job!
Not I!
As a matter of fact 4 months ago, a friend of mine who was working an international dream job in NY City got spooked by layoffs. I said I have faith in the ability my friend has and would support writing any documents attesting to corporate and international abilities.
My friend got a higher paying job (high five figures) of all places back in RI at an international corporation and tendered resignation at NY City dream job.
So there are jobs out there Justin. !4% cut means next step is out the door on unemployment.
By taking the pay cut you told your boss you were making too much money and would bend over and say thank you! Must be a free market thing!
Posted by: Ken at December 7, 2008 8:45 PMAh, Ken. Charity doth bind my tongue.
Suffice to say that I'm hardly sitting still. It's been a week since the pay cut. I don't imagine your friend landed his new job that quickly.
In the meantime, my children have to be fed somehow.
Posted by: Justin Katz at December 7, 2008 8:53 PMJustin,
Doubting Thomas as I also was, to my pleasant surprise I was informed the new job was secured in record time after four new company paid travel interviews NY to RI and return.
According to my friend, it will be a wonderful Christmas and New Years this year with no stress.
Of course I’d like to take some credit because this 30s something worked directly under me and partook of my tutelage before my retirement.
Posted by: Ken at December 7, 2008 9:03 PM>>RI TDI tax is a separate case. I didn’t know the general RI workforce can collect TDI when out of work but State of RI employee can not collect!
Red herring.
Similar to the red herring by the teachers about "woe is us, we don't have Social Security benefits so it wouldn't be fair to cut our no minimum retirement age / 75% of highest three years average / 3% increases for life pensions." (BTW, about half of the teachers in RI are also in the SS system.)
If the unions / state employees wanted to be in the TDI system, don't you think that the General Assembly would have accommodated them years ago?
They'd much rather have the humungous vacation / sick / personal days accruals.
Just try to freeze the pensions and put state employees into TDI instead of huge vacation accruals, and watch them scream bloody murder.
Posted by: Tom W at December 7, 2008 11:41 PMJust a few points of clarification that didn't make it into the ProJo story:
The retirement incentive is not something that happened recently. It began 7/1/97. The Board of Governors voted on 9/17/07 to end the incentive and sunset it at 6/30/08, so it is no longer available. At the time the Board took the vote in '07, there was no way to accurately predict how many people would retire before 6/30/08. Obviously, the change in post-retiree health care benefits - something that did not happen until union contracts were negotiated in 3/08 - spurred more retirements than might otherwise have occurred.
Also, there are caps on the amount of accrued vacation and sick time someone can carry from year to year. That cap is 54 vacation days (if one is a statutory employee) and 44 days otherwise. The maximum accrued sick time one can carry over is 125 days. Payment for accrued sick time (when one leaves the system) is based on a formula. No payout is allowed if accrued sick time is below 390 hours.