News Column

California's Retiring State Workers Cash in Vacation for Big Bucks

Oct. 15, 2012

Thomas Peele and Daniel J. Willis

California's Retiring State Workers

They could leave their hearts in San Francisco -- or any of the Golden State's other big vacation spots -- but thousands of California's state workers won't even leave their desks.

An analysis of the last three years of government salary data shows state employees are continuing to store up massive banks of vacation, instead of heading to Big Sur or hitting the slopes at Lake Tahoe. They're cashing in by retiring with whopping final paychecks worth, in some cases, more than $500,000 in unused time off.

From 2009 through 2011, cash-strapped California paid more than $800 million for days off state workers never used -- a problem that has grown by tens of millions of dollars in the four years since this newspaper first investigated the costly practice.

It's an accounting liability that private companies work aggressively to avoid, but one that continues to pile up in Sacramento. And, ironically, the problem grew even worse in recent years when the state tried to save cash by forcing workers to take unpaid furlough days as an emergency budget fix. As a result, banks of unused vacation grew even larger.

"Is the system broken? Obviously the system's broken," said Tim Malan, a supervising dentist at Avenal State Prison, who retired in 2009 with 247 days off still on the books, sweetening his final paycheck by an extra $317,000.

Like Malan, more than 4,000 people retired from the state over the past three years with an extra $50,000 or

more for unused vacation and comp time, the newspaper's analysis of pay data from 153 state departments shows. That's almost four employees cashing out at least that much money every day. An additional 16,302 state workers retired during the three-year period with payments from $10,000 to $50,000 each.

While Malan sees why taxpayers might be bug-eyed at the vacation payouts, he said staffing shortages are largely to blame.

"If you go anywhere on vacation they give you grief for not doing the job," Malan said. "I had plenty of vacation and I couldn't take it. Then I got all this money."

When asked last month about vacation and comp time payouts, Gov. Jerry Brown downplayed the issue, saying the state makes employees take vacation before it piles up.

But when pressed for a further response, a spokeswoman from Brown's office acknowledged that the administration intends to tackle what the newspaper's analysis shows was a $293 million problem in 2011 at a time the governor is asking voters to approve a tax hike at the polls to avoid billions of dollars in cuts. By comparison, the payout was $174 million in the 2007-08 fiscal year.

"This problem, like the $26 billion deficit, is a carry-over from a prior era," Elizabeth Ashford wrote in an email. "Employees were furloughed for short-term savings, which has left a long-term debt in the form of accumulated leave.

"We have already cut compensation for state employees by 5 percent and reformed the public pension system, and we'll fix this problem too."

The state doesn't allow employees to cash in vacation time while they are still employed. But earlier this year, several state parks employees were disciplined and one fired after auditors found a secret program that allowed more than 50 parks employees to cash in a combined $270,000 worth of unused time.

This newspaper's analysis showed the biggest payouts go to state workers with vital jobs, like firefighters, highway patrol officers and doctors at state hospitals or prisons. But others -- lawyers, researchers at obscure state commissions, traffic engineers -- also got fat checks. Managers are supposed to help workers keep vacation balances under 640 hours or 80 days, and Ashford said 87 percent of current state employees are under that cap. However, state officials said in interviews, nothing stops employees from exceeding it.

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