Christie cut aid to municipalities and schools by $1.3 billion to help balance the current state budget. In September, he proposed rolling back a 9 percent benefits increase enacted in 2001, freezing cost-of-living raises and increasing the minimum retirement age to help reduce a $53.9 billion deficit in the state pension system.

The governor also wants workers to pay 30 percent of the cost of health-insurance premiums, up from the current 8.5 percent.

Christie and unions for government workers have clashed since he took office in January 2010. The New Jersey Education Association spent $6.6 million last year, more than any other lobbying organization, on ads criticizing Christie's proposals.

Leaving Workforce

Public-employee retirements jumped by 60 percent in 2010 to more than 20,000 as Christie pushed his proposals. Through the beginning of June, 17,997 workers have submitted retirement papers this year, according to state records. If applications continue at the current pace, at least 23,000 police, teachers and other public workers will retire this year, a 14 percent jump from last year.

New Jersey isn't alone in allowing towns to pay employees lump sums for unused sick and vacation days. In California, Anne Montgomery was paid $315,531 in 2009 as city manager of Mill Valley, a San Francisco suburb of 14,000 people. That included $124,000 for unused leave, according to data provided by the League of California Cities and the controller's office.

When Ken Hampian retired as city manager of San Luis Obispo, California, in 2009, he augmented his $194,168 base salary with $52,144 by cashing out unused vacation and administrative leave, according to figures listed in a 2010 survey of city manager pay conducted by the League.

Unused Time

California Governor Jerry Brown, a Democrat, has said he will support legislation that would forbid municipal employees from including unused vacation and sick time in their pension calculations. That practice isn't allowed in New Jersey.

Carnevale, the Hackensack official, said the payouts were among the biggest expenses he had to cover each year when preparing budgets. While previous labor agreements in the city allowed workers to retain the payments, he said he supports either capping or getting rid of them for new hires.