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Photo by Robert Terrell
By a vote of 65 to three Thursday morning, the House overwhelmingly passed legislation that would prevent the vast majority of government retirees after that date from earning both a pension and government paycheck, commonly referred to as “double dipping.”
Gov. Bill Richardson has said he likes the ‘double dipping bill.’ He vetoed a similar measure last year.
The House’s approval of a ban on future double dipping came three days after the Senate passed SB 207 35 to 6, sending it on to the House. Neither the House Appropriations and Finance Committee nor the House as a whole altered the bill, although an attempt was made on the House floor Thursday morning.
“This measure HAD to pass without amendment to ensure it went to the Governor this year,” Rep. Dennis Roch, R-Tucumcari, said on the Independent live blog Thursday during debate on the bill.
Currently a public retiree can earn both a pension and government paycheck.
Under the new rules workers who retire after July 1 would have to sit out for 12 months following retirement before returning to government work. They also would have to stop receiving their pensions for as long as they are back at work.
Those exempted from the new rules 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 the more than 1,400 retirees who currently 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.
Rep. Bill Rehm, R-Albuquerque, a retired police officer, tried to amend the bill, arguing by not exempting public safety retirees from the new rules smaller communities around New Mexico would “lose the ability to retain an experienced person to be your chief of police.”
A similar argument was made in the Senate earlier in the week. But as happened in that chamber, the House shot down that amendment.
An earlier version of the Senate’s ‘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 the Senate 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 in the letter.
Ultimately the majority of lawmakers in the Senate were persuaded by PERA’s concerns. It appeared effective in the House as well.
Over the past year the practice of ‘double dipping’ has gained in notoriety and scrutiny. The state allowed government retirees to return to work while collecting a pension several years ago.
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.
Requiring current ‘double dippers’ pay the employee’s share would save the general fund roughly $1.23 million, according to a legislative analysis.
Other critics say that double dipping keeps younger workers from moving up the job ranks because retirees inhabit them.
