PORTLAND — School officials are offering an enhanced retirement incentive to more than 200 employees to entice many of them to leave their jobs by the end of this academic year.
The incentive – which also was offered last year – is designed to reduce the district’s payroll and potential layoffs in anticipation of an estimated $4 million revenue shortfall in the school budget starting July 1, said Superintendent Jim Morse.
The school board agreed Tuesday evening to offer the incentive, which includes a one-time payout ranging from $10,000 to as much as $20,000 for higher-paid employees. It also reduces the time that employees must have worked in the district to be eligible, to 10 years. In past years, the service minimum was 25 years.
Morse stipulated, and the board agreed, that the incentive will be honored only if enough employees take it to generate significant savings. He also raised concern that school employees might be inclined to delay retirement because the district has offered incentives for five years in a row.
“It’s not so much that I’m playing hardball,” Morse said after the meeting. “Employees need to understand that this offer may not happen every year.”
The amount the district saves will depend on the number of employees who take the offer, and their salaries.
To be eligible, employees must have reached retirement age, which is 60 or 62, depending on when they entered the state retirement system. The district now has more than 200 eligible employees.
Forty-three school employees accepted the enhanced retirement incentive last year, when it was first offered. The retirements reduced the district’s payroll by $1.5 million because positions were left vacant or were filled with lower-paid employees, Morse said.
Barring other budget cuts for the 2011-12 school year, a revenue reduction of $4 million would call for as many as 80 layoffs – about 7 percent of the estimated 1,140 workers in the city’s public schools.
“The incentive certainly helped us last year, and this budget looks like it will be even worse,” said Kathleen Casasa, the teachers union president.
Casasa said more than 100 teachers are eligible for retirement. Morse said some of them are in their 70s.
The weak economy and fear of losing health benefits have kept some teachers from retiring, Casasa said.
And while district officials want higher-paid employees to retire if they’re eligible, Casasa said older teachers aren’t feeling pressured to give up their jobs so that younger teachers won’t be laid off.
“I’m not hearing that yet,” she said. “Retirement is a very personal thing. I tell people to make the decision that’s right for them.”
With past retirement incentives, employees chose between a one-time payment of $10,000 and annual payments equal to their share of health insurance costs until they turned 65 and qualified for Medicare.
With the enhanced incentive, employees will get a minimum of $10,000 or 30 percent of their latest salary, up to $20,000. Payments will be made in four annual installments. Interested workers must apply by Feb. 28.
School officials kept the minimum payment at $10,000 for employees on the lower end of the salary scale and increased the incentive for higher-paid employees to entice more teachers to retire.
Most teachers who accepted the incentive last year received $16,000 to $18,000, school officials said at the time.
Among the 43 people who accepted the incentive last year, there were 21 teachers, a nurse, a social worker, a guidance counselor, an assistant principal, three administrators, six food service workers, six secretaries, two educational technicians and one custodian.
Staff Writer Kelley Bouchard can be contacted at 791-6328 or at: [email protected]