Workers oppose cutting state’s pension benefits
At a time when government workers have agreed to reduce pay raises to prevent layoffs, union leaders for police officers, firefighters, teachers and other public employees on Friday blasted a long-term measure that would reduce government pensions and save millions in tax dollars a year.
They told members of the state Senate Finance Committee that government services and public school students will suffer, employees won’t get equal compensation for the same job, and that the Nevada economy will deteriorate further if the Legislature enacts a proposal intended to make government pensions more nearly equivalent to private-sector retirement benefits.
“This goes 180 degrees to the other side, and it is knee-jerk reaction to what has gone on with the economy,” said Las Vegas police Detective David Kallas, lobbyist for the Las Vegas Police Protective Association, which represents about 4,000 Las Vegas police and corrections officers.
“There has to be a sense of sacrifice, but there has to be reasonable compromise,” said Dennis Mallory, executive director of the American Federation of State, County and Municipal Employees Local 4041. “I think we can maintain the long-term viability of the (pension) plan without these Draconian cuts.”
Meanwhile, business leaders from Reno and Las Vegas, and the Nevada Taxpayers Association, said the proposal from Republican Gov. Jim Gibbons is necessary to rein in escalating costs paid by local and state governments to cover pensions while classrooms grow more crowded and other public services suffer.
“At some point you have to step back and say ‘What have we done?’ We are on automatic pilot on the (pension) increases,” Carole Vilardo, president of the Nevada Taxpayers Association, told the committee. “I do urge you to take a very hard look at this. … How else do you solve the problem we have gotten ourselves into?”
The largest group of government workers eligible for pensions consists of Clark County School District employees, followed by state workers and Clark County employees.
Unions representing employees of Clark County, the city of Las Vegas and the Metropolitan Police Department within the past month have agreed to trim or eliminate their cost-of-living pay raises in recognition of tough economic times and to help reduce the prospect of layoffs, but the cost savings will meet just a fraction of the budget deficits facing government agencies.
The Finance Committee hearing was held in Carson City and teleconferenced to the Sawyer Building in Las Vegas, where about 80 government employees — mostly firefighters — attended to oppose the proposal. Committee members heard testimony for nearly three hours, asked state pension officials to provide additional information and said they expect the proposal to be discussed during the remaining weeks of the legislative session.
“It’s going to be six or seven weeks or, maybe, two years if we can’t get to it all this session,” said Sen. Bob Coffin, D-Las Vegas.
Senate Bill 367 is sponsored by Gov. Jim Gibbons and reflects recommendations from the governor’s Spending and Government Efficiency Commission. The advisory panel, which made several recommendations for reducing state and local government costs, is made up of seven Democrat and seven Republican private-sector business people.
The so-called SAGE Commission unanimously recommended: That the retirement age for most government workers be raised to 60, and 35 years of service be required to qualify for early retirement with a lower pension; that pensions be calculated from base pay only; that the calculation formula itself be changed to reduce costs; and that the new provisions apply only to employees hired after January 2010.
Some provisions of the bill, such as raising the retirement age and reducing the multiplier used for calculating years or service, would not apply to police and firefighters. However, eliminating special pay types — such as call-back pay, hazardous-duty pay and shift differential pay — from the calculation for retirement benefits would impact firefighters and police more than other government employees.
Union representatives told Senate Minority Leader Bill Raggio, R-Reno, that they can’t support any element of the proposal in its current form, but that they could support some provisions if they were made more palatable. They also said the PERS system is solvent, considered healthy by financial experts and that there is no need to overhaul it.
The proposal comes 24 years after the Legislature last took steps to reduce retirement benefits for government employees, and 22 years after the federal government dropped for new employees its traditional pension program for one more like private-sector retirement plans.
Retired police officers and firefighters from Nevada in 2007 received an average of $3,549 a month from PERS, or 60 percent more than the average $2,216 received by other government employees, according to PERS data.
The average monthly pension for police and firefighters climbed 59 percent from 1998 to 2007, and the average pension for other government workers grew 51 percent in that time, according to PERS.
The average retirement age for a government worker in Nevada is 60 years with 18.5 years of service.
For police and firefighters, the average retirement age is 55 after 22 years on the job, according to PERS.
Contact reporter Frank Geary at fgeary@reviewjournal.com or 702-383-0277.