Senate passes double dipping legislation

Photo by Robert Terrell

The vast majority of government retirees couldn’t “double dip” after July 1 under a bill the Senate passed Monday.

Senators passed the legislation 35 to 6 after a lengthy, complex debate that exposed urban-rural tensions among lawmakers. The legislation now heads to the House.

Currently a public retiree can earn both a pension and government paycheck, commonly referred to as “double dipping.”

But that practice would stop for government employees who retire after July 1 and return to work for state, local or county governments if the bill clears the House and Gov. Bill Richardson signs it.

Under the new rules workers would have to sit out for 12 months following retirement before returning to government work–and then stop receiving their pensions for as long as they work.

Those exempted would be elected officials, temporary legislative employees and the more than 1,400 people who currently double dip.

Temporary legislative employees work for the Legislature during the 30-day and 60-day legislative sessions.

While the legislation doesn’t go after current double dippers, it does require those individuals to begin contributing into the state’s retirement funds.

Current double dippers–unlike most employees–don’t do that.

“We need to put the genie back in [the bottle],” said the bill’s sponsor, Sen. David Ulibarri of Grants.

The state allowed government retirees to return to work while collecting a pension several years ago. But over the past year the practice has gained in notoriety and scrutiny. This bill (SB207) is a proposed solution.

Critics have pointed out that New Mexico can’t afford double dipping in hard economic times.

Because current double dippers don’t contribute into the state’s retirement funds, the state is forced to pay a double share into the retirement funds – the employee’s and employer’s – for these particular workers. Those payments come out of the state’s general fund, the state’s main account, which has a projected budget shortfall of several hundred million dollars next year.

Other critics say that double dipping keeps younger workers from moving up the job ranks because retirees inhabit them.

Although the ‘double dipping’ legislation passed, many lawmakers Monday groused that the bill before them wasn’t a perfect fix.

Some pointed out that the bill doesn’t stop double dipping altogether by retroactively preventing those who benefit from it now from living under the new rules after July 1.

And that gave many lawmakers the most heartburn — that the legislation wouldn’t stop the more than 1,400 double dippers from benefiting from the practice.

“The people cried reform…and there is no reform,” said Sen. Rod Adair, R-Roswell, adding that “we are not addressing the problem.”

The people of New Mexico are angry at people who get $80,000 in retirement pensions and $90,000 to the do the same job he or she retired from, not the police captain who retires and then returns to work as a patrol officer, Adair said.

Adair attempted unsuccessfully to amend Ulibarri’s bill to prevent a retiree from returning to the same job he or she held before they retired.

“He is hurting the unemployment rate,” Adair said, referring to a generic double dipper. “He is hurting office morale.”

But that amendment failed 13 to 28.

Several rural state lawmakers also attempted to change Ulibarri’s bill, complaining that an end to ‘double dipping’ would make it more difficult to fill certain jobs when the new rules go into effect.

Often the most qualified candidates for public safety jobs are retired police officers in small towns and county governments, lawmakers said.

Because the retirees already have been trained, the towns and counties don’t bear the cost of training them. But with the new rules, training costs will rise for these small communities, lawmakers said.

That’s because forcing future double dippers to temporarily give up their pensions to go back to work will dissuade the most qualified candidates from applying, the lawmakers said.

Sen. Stuart Ingle, R-Portales, tried unsuccessfully to exempt small, rural communities from the new rules in the bill, but the amendment would have applied to as many as two-thirds of the counties in the state.

Under that amendment small communities could identify “critical needs” and then hire double dippers to fill them. Those individuals wouldn’t have had to sit out for 12 months or give their pension up temporarily.

Not everyone liked the amendment, including Sen. Richard Martinez, D-Española.

“Coming from a small and very political county, I can only imagine what the critical needs are,” quipped Martinez, who comes from Rio Arriba County, famous for its political intrigue.

After Ingle’s amendment failed by a 14 to 26 vote, Sen. Gay Kernan, R-Hobbs, said the cost to small communities would be significant.

“I’m sorry that those in urban communities don’t have a feel for what we go through in small communities,” Kernan said.

An earlier version of the ‘double dipping’ bill had exempted retirees who returned to work in small communities around the state, as well as public safety officers and firefighters. All told, about 700 people would have been exempted from the new rules.

But Ulibarri’s bill removed those exceptions after the Public Employees Retirement Association (PERA) estimated in a Feb. 9 letter that the fund would lose $16 million in contributions during the first year if all those retirees were exempted.

That’s because the retirees would be in jobs instead of active employees who contribute into the fund, PERA’s director Terry Slattery, wrote.

Ultimately the majority of lawmakers were persuaded by PERA’s concerns.