Senate Approves Plan to Reduce State Personnel Costs

COMMONWEALTH OF MASSACHUSETTS
MASSACHUSETTS SENATE
STATE HOUSE, BOSTON 02133-1053

Senator Joan B. Lovely
State Senator
2nd Essex District

FOR IMMEDIATE RELEASE:

April 16, 2015

Senate Approves Plan to Reduce State Personnel Costs

(Boston) –The Senate on Wednesday voted to provide the executive branch with a set of tools to achieve payroll savings, including the continuation of a current hiring freeze, buyouts and retirement incentives, announced Senator Joan Lovely. The bill offers options for the Executive Office of Administration and Finance to reduce state personnel costs by $325.1 million in gross savings, in order to make $171.9 million available in the Fiscal Year 2016 budget.

“First and foremost, the early retirement proposal aims to generate cost-savings for the Commonwealth and its taxpayers for the upcoming fiscal year and reduce the likelihood of large-scale layoffs,” said Senator Joan Lovely. “The Senate added measures to enhance reporting, monitor the program’s effectiveness, and give the Administration the flexibility to achieve greater efficiencies within its branch of government.”

“Through a collaborative process, the Senate has crafted a strong bill that offers tools to achieve savings without undermining the operation of state government,” said Senator Karen Spilka (D-Ashland), Chair of the Senate Committee on Ways and Means. “The state’s fiscal situation is tight, and these savings will allow us to pass a budget for Fiscal Year 2016 that reflects our priorities and advances families and communities across the Commonwealth.”

“Thank you Senator Spilka and the Committee on Ways and Means for crafting a bill that achieves the same amount of savings as the House’s early retirement bill while also protecting the ability of agencies to effectively deliver services,” said Senate President Stan Rosenberg (D-Amherst). “The Committee strengthened the bill by incorporating ideas from other Senators and I commend them for their hard work on this important legislation.”

The bill sets a cap of 4,500 executive department employees who are eligible to retire or resign and requires detailed reporting to the Legislature and State Retirement Board to ensure accountability and transparency during the implementation process.

Reporting requirements would allow the Legislature and State Retirement Board to monitor the number of employees retiring and the impact on agency operations. The bill also directs the Administration to designate “critical” positions key to the mission of state agencies that would be exempt from staff reductions and “priority fill” positions that would be the first to be rehired during the backfill process.

The bill offers several tools for the Administration to use to reduce personnel costs, such as authorizing buyouts of targeted employees. Additionally, the Administration’s current hiring freeze could be continued to achieve savings without the possible financial liability associated with a retirement incentive program.

The retirement incentive program would be open to executive department employees who are Group 1 members of the state retirement system and vested with a minimum of 20 years of service or are at least 55 years old on the date of retirement. Employees not funded from the state payroll, elected officials and certain other employees are not eligible for the program. The eligibility limits are intended to guarantee expected savings by giving the executive branch direct control over the backfill of positions.

The application period would be from April 27 through May 29, 2015, with a retirement date of June 30, 2015.

To allow for sufficient knowledge transfer from departing employees, the bill allows retiring employees to be rehired as consultants for up to 90 days.

In March, the House of Representatives passed a similar bill establishing an employee retirement incentive program. The Senate and House will now produce a compromise bill for final passage and the Governor’s signature.

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