Friday, September 4, 2015

Retirement incentives and service outcomes

Pa. Auditor General Jack Wagner is promoting an idea he has for reducing the size of state government: He wants the state to offer employees a voluntary retirement incentive. He says it worked well in his department:

Retirement incentives and service outcomes

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Pennsylvania Auditor General Jack Wagner.
Pennsylvania Auditor General Jack Wagner.

Pa. Auditor General Jack Wagner is promoting an idea he has for reducing the size of state government: He wants the state to offer employees a voluntary retirement incentive. He says it worked well in his department:

Wagner offered management and, with cooperation from the American Federation of State, County and Municipal Employees, union employees of the Department of the Auditor General a one-time voluntary retirement incentive in July of this year. The 50 workers who accepted the incentive received $1,000 for each year of service, up to a maximum of $25,000, and left employment with the department on or before Sept. 3, 2010.

This resulted in $1.5 million in savings from his department when 50 workers (7.5 percent of its workforce) took the incentive. The same rate statewide would save $381 million, Wagner says. And all without laying anyone off.

Our question about this is: What if you need the people who leave? We understand that Wagner thinks state government is too big. But this plan, as described on the Auditor General's website, pays no mind to who takes the retirement incentive and whether they perform duties that need to be performed. Now presumably you can do some restructuring after people make their decisions, promoting and transferring so that necessary positions are filled. But if you don't have people with the requisite skills for certain jobs? It seems like this plan is paying a lot more attention to outputs than outcomes.

We've got a call out to the Auditor General about this and we'll update if there's something we're missing.

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Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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