(Bloomberg News) Teri Essex retired a year earlier than planned when she was offered $56,000 to leave her elementary-school teaching job in Elk Grove, Calif.
Instead of accepting a salary cut, larger classes and less money for supplies from spending reductions made last year by California lawmakers closing a $19 billion budget deficit, Essex, 60, took the money over nine years to retire in 2010 after 21 years of teaching.
"The financial buyout was a no-brainer," said Essex, whose school was 15 miles (24 kilometers) outside Sacramento. Even though she'll give up about $300 monthly by quitting early, she said, "Once you start thinking about retiring, it was like, 'Oh yeah, I want to do this.'"
California, Florida and Texas are seeing more retirements as rising benefit costs, pay cuts and looming furloughs prompt workers to leave. Inducements to quit early also boosted departures in New York as U.S. states tackled budget gaps totaling more than $540 billion since fiscal 2009, according to the Center on Budget and Policy Priorities. In New Jersey, Wisconsin and Ohio, added motivation came from attacks on unions over costs that strained budgets.
"These are people electing to retire because they're worried," Jeffrey Keefe, who teaches labor and employment relations at Rutgers University in New Brunswick, N.J., said in a telephone interview. "They are demoralized by the current public-employee condemnations."
Potential Brain Drain
One-third of state and local workers with special skills, such as teachers, nurses, legal staff, engineers and managers, will be eligible to retire within five years, said Elizabeth Kellar, president of the Washington-based Center for State and Local Government Excellence, a nonprofit research organization. Retirements delayed by the recession and an increase in eligible workers contributed to the recent increases.
That may exacerbate a brain drain at states and municipalities, where employment has fallen by 2.5% since its peak in August 2008, according to U.S. Bureau of Labor Statistics data. Since 1995, the number of state employees outside education is little changed.
New Jersey Governor Chris Christie likened the teacher's union in his state to "political thugs" in an April ABC interview with Diane Sawyer. He said on NBC's Today Show in February that benefits were "out of control." When a teacher at a public event last May complained about the salary at her job, Christie told her, "You don't have to do it."
May Spike Again