State offers early retirement to thousands; layoffs possible

State offers early retirement to thousands; layoffs possible
THE ASSOCIATED PRESS
BOSTON — Thousands of state employees could receive incentives to retire early under a proposal Gov. Charlie Baker hopes will help plug a sizeable deficit in the next state budget, the administration confirmed Monday.

The governor's office is hoping about 4,500 workers will opt for early retirement, saving the state about $178 million, according to Kristen Lepore, secretary of Administration and Finance. Those eligible for the program would be required to sign up between April 6 and May 29.

"We need to get to this number quickly," Lepore said, adding the alternative to a successful early retirement program would be layoffs.

Baker planned to file a bill on Wednesday, the same day the Republican submits his proposed budget to the Democratic-controlled Legislature for the fiscal year beginning July 1.

The Massachusetts Taxpayers Foundation, a budget watchdog group, has said that a gap of about $1.5 billion likely exists between anticipated revenues and the spending that would be required to maintain current program levels in the budget.

Baker was scheduled to meet privately Monday with House Speaker Robert DeLeo and Senate President Stanley Rosenberg.

Lawmakers would have to act on the bill within the next several weeks for it to take effect in time for sign-ups to begin in April and the savings to be realized in the next fiscal year.

The program would be available to executive branch employees who are at least 55 or have accrued 20 years of service. But workers could also qualify by adding five years to age or length of service, or some combination of those two factors. For example, someone who is 52 with 18 years of service could apply, Lepore said.

The administration estimates that about 20 percent of the jobs that become vacant through early retirement would be refilled, resulting in the net $178 million in savings.

The Boston Globe first reported on the plan Monday.

Legislators could look at several factors, including the impact on the state's pension system, before deciding whether to authorize early retirements.

"I look forward to reviewing the details of the governor's proposal, keeping in mind the impact it will have on our unfunded pension liability and potential effect on the state's bond rating," said state Treasurer Deb Goldberg, a Democrat who oversees the state retirement board.

Baker has ruled out new taxes, but Lepore said the budget would include other approaches toward closing the projected shortfall.

"This is one of many new tools and spending solutions that we will be announcing," she said, adding the administration hoped to avoid cuts that would impact core state government services.

One proposal calls for an amnesty program for taxpayers who have tax obligations in Massachusetts but have never filed in the state. Baker anticipates the measure to generate $100 million.

Last month the Legislature approved most of the governor's plan to close a projected $768 million shortfall in the state budget for the current fiscal year ending June 30. That gap included at least $50 million in unanticipated snow removal costs resulting from a record-setting stretch of winter storms.