Public employees, teachers, should see take-home pay boosted - East Valley Tribune: East Valley Local News

Public employees, teachers, should see take-home pay boosted

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Posted: Tuesday, December 27, 2011 8:51 pm | Updated: 12:18 pm, Tue Jan 3, 2012.

 

By Howard Fischer

Capitol Media Services

More than 200,000 public employees and teachers may find a little bit more in their paychecks this coming spring.

Senate Republican leaders said last week they are crafting legislation to repeal a law that took effect in July requiring those in the Arizona State Retirement System to contribute more to their pensions. The move, if successful, should boost the average worker’s biweekly take-home pay by about $20.

But this is hardly a pay hike. In fact, all the move does is bring employees back to where they were before lawmakers went looking for cash to balance the budget.

Prior to July, the state and its workers in the main retirement plan each contributed an equal amount of the assessment levied to keep the fund financially solvent.

The legislation altered that to have workers pay 53 percent of the cost, reducing the burden on the state to 47 percent.

That same change was mandated for others in the pension plan, including workers at public schools, counties, community colleges, universities and some cities. And to bolster the state’s bottom line, schools -- but not others -- were required to send whatever they saved to the state treasury.

All totaled, state officials figured they could pick up more than $41 million this budget year.

Senate Majority Leader Andy Biggs said the maneuver was made because lawmakers were simply out of options. And he said they realized the implications.

“That affects people’s salaries directly,’’ he said.

“That was probably one of the last things that went into the budget ... to try to balance it,’’ Biggs continued. “And it should be one of the first things to come out.’’

Biggs said that is now possible, with legislative budget staffers forecasting the state will end the fiscal year with more than $400 million in the bank.

It actually may not take legislative action to undo the law.

This month, a judge heard arguments by three unions representing teachers and state and local government workers that the change in the contribution rates is illegal.

Attorneys told Judge Eileen Willett that the Arizona Constitution says that membership in a public retirement system is contractual and that “benefits shall not be diminished or impaired.’’ They argued that altering the contribution formula to get the same benefit is tantamount to reducing the benefit.

Lawyers for the state contend the legislation is legal. Willett has not said when she will rule.

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