Image Copyright Sever Oprisan, 2013.
Used under license from Shutterstock.com
Taxpayers owe a growing debt to state employees for their unused paid time off, recently totaling more than $700 million or $11,500 per employee.
In other words, if every state employee retired today, taxpayers would owe them more than $700 million for their unused vacation and sick days, up from $475 million in 2004.
The state will pay off a portion of this debt – put off in 2009 by then-Gov. M. Jodi Rell – this year. During the financial crisis, General Assembly and Rell used an early retirement incentive program to encourage more workers to retire.
However, Special Act 09-06, the law that created the retirement program, delayed payouts to these retirees for their unused paid time off. Instead of getting the payouts upon retirement, they would get three equal payments in then-far-off fiscal year 2013.
The total cost shifted to this year is about $59.7 million, contributing to the current deficit of $64.4 million. According to Comptroller Kevin Lembo’s office, the state has paid the first installment of $19.9 million.
The overall debt to employees has grown over recent years. In 2004, the state owed $475 million or about $8,100 per employee. The obligations grew 8.8 percent in 2005 and more than 15 percent in 2006.
On average since 2004, the amount owed to state employees for unused paid time off grew by 6 percent a year.
State employees generally earn 15 sick days and 15 vacation days a year.
State employees hired recently can cash in up to 60 vacation days for their full value. Upon retirement, four sick days equal one additional day of pay. The maximum total payout is 120 days of salary, or about half a year’s pay.
Employees hired before 1977 can cash in up to 120 vacation days.