Ending state-employee bonuses costs taxpayers more money

    The bipartisan plan passed Wednesday to balance the state budget eliminated some state employee bonuses that have been the subject of populist ire, but replaced those bonuses with raises of the same value, which will end up costing taxpayers more.

    Under the new rules, non-union state employees will receive their last longevity payment in April. Beginning in July, their salary will go up by the value of their annual bonus.

    Previous money-saving efforts had frozen the value of longevity bonuses at $6.2 million, so these state employees actually benefit from the change because the additional salary will grow with future cost-of-living increases or other percentage increases.

    If state employees receive a 3 percent salary increase next year, the transition will cost the state about $200,000.

    Non-union employees will also benefit when they retire because the value of their accrued vacation and sick time will increase with their salary, resulting in proportionately larger payouts, according to the Office of Fiscal Analysis. Longevity pay is not included in calculations for these payments.

    Non-union state employees with salaries set by statute will continue to receive longevity bonuses, but it is unclear how many fall into this category.

    According to OFA, the state could save some money if non-union employees retire between April and June.