Tsunami of sick time threatens Bay State
‘That’s unworkable, particularly when our research showed that some of these people in these positions don’t fill out timesheets. The state just can’t afford to pay out these huge sums of money.’ — GLENN CUNHA State IG
Massachusetts taxpayers are on the hook for a staggering $558 million in unused sick and vacation time for state workers, according to a top Beacon Hill watchdog who is warning the potential retirement payouts could turn into a massive budget hit.
Equally ominous, more than 10 percent of the state government’s aging workforce has already racked up six months of unused sick time, Inspector General Glenn Cunha says in a letter urging lawmakers to rein in the looming benefits disaster. Cunha’s review found:
• More than 10,400 employees, or about 12 percent of the state’s 90,000-member workforce, are sitting on 1,000 hours or more of unused sick time, the equivalent of six months. Cunha said it’s created an estimated $117 million liability under state rules that pay workers 20 percent of their accrued sick time when they retire;
• Nearly 20,000 employees have accumulated at least five weeks of unused vacation, which Cunha “conservatively” estimates will cost taxpayers $217 million;
• The hit from these hefty payouts may be coming soon. About 30 percent of the state’s workforce is already eligible to retire.
The IG fired off his warning in a letter to the leaders of the Legislature’s Committee on Public Service, urging them to take quick action in the face of the looming financial hit. “This is not a distant risk,” Cunha told lawmakers.
He estimates that the state’s total liability on unused sick and vacation time stood at $558 million as of last year, a figure Cunha called “staggering.”
“People need employment benefits,” he said, “but they really aren’t retirement benefits.”
Some workers, he added, have gotten a 100-percent payout on unused sick time thanks to generous contracts.
“That’s unworkable, particularly when our research showed that some of these people in these positions don’t fill out timesheets,” Cunha said. “The state just can’t afford to pay out these huge sums of money.”
Several bills have already been filed on Beacon Hill seeking to install reforms, and Gov. Charlie Baker wants to freeze all unused sick time at 1,000 hours. His plan, inserted into his last budget proposal, was shot down by the Democrat-controlled House and Senate.
Cunha is proposing his own changes, such as slapping a lid on sick leave payouts at 200 hours. He specifically cited the $266,000 sick time payout to former Mount Wachusett Community College President Daniel Asquino this year. With the proposed cap, it would have come to less than $30,000, Cunha said. He also pushed lawmakers to cap at two weeks the amount of unused vacation employees can carry over annually. One unidentified employee Cunha highlighted has accrued nearly 340 days, equal to a potential $144,000 payout, on a salary of $58 per hour.
State Rep. Jerald Parisella, who chairs the Public Service Committee, promised to hold a hearing on Cunha’s proposals and other bills within the next month. “It’s important to hear from all sides,” Parisella said.
A public hearing is likely to draw stiff opposition from labor unions, who say any reforms should be negotiated in collective bargaining.
“Proposals like this are a common reaction after top earners like our public higher education executives retire with a golden parachute,” said Jim Durkin, legislative director for AFSCME Council 93. “Suddenly everyone is a target.”
David Holway, president of the National Association of Government Employees, pointed to other data in Cunha’s letter, which notes that between January 2014 and last November, some 9,100 employees retired with an average payout of $15,000. “That’s nothing that’s going to break the bank,” Holway said. “This isn’t anything the Legislature should be involved in. Those discussions should be at the contract table.”