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APNewsBreak: Iowa Gov. Earns Salary Plus Pension

IOWA CITY, Iowa (AP) - Iowa Gov. Terry Branstad is collecting both a $130,000 salary as governor and a state pension worth more than $50,000 per year for earlier service - a legal practice, but one critics say is hypocritical given the governor's plans to slash public spending and his calls for shared sacrifice.

Branstad has been receiving pension payments that reflect his prior 26-year tenure as governor, lieutenant governor and state lawmaker since he was sworn in for a fifth term last month following a 12-year hiatus from state service, spokesman Tim Albrecht said Tuesday. The Republican's salary will not reduce his retirement benefits, unlike other retired state workers under age 65 who return to service, because of a provision he signed into law as governor in 1992 that exempts retirees who return as elected officials from pension cuts.

Albrecht said Branstad "made a significant personal sacrifice" by stepping down as president of Des Moines University to run for governor. The university position paid $357,000 in 2008, according to the school's most recent tax filing. Albrecht said Branstad did not earn a salary in 2010 and paid for his own health insurance as he campaigned across the state.

As for his decision to keep his pension, Albrecht said: "If somebody earns that income, they are entitled to it."

Critics concede that point. But a spokesman for the Democratic Party of Iowa and one top labor leader said Branstad is disingenuous for "double-dipping" as he moves forward with plans to lay off up to 1,500 employees, take away wage increases negotiated by his predecessor, and end universal preschool.

"He's asking for state employees to give up pay raises which are modest, at best, and to pay more for their insurance. I guess, Governor Branstad, where is your shared sacrifice?" said Danny Homan, president of the largest state employees union. "If you are a public servant, why are you even taking a salary as governor? Why aren't you living off your already earned pension?"

"At a time when Branstad is increasing the burden on Iowa families through unprecedented cuts to education, including eliminating universal preschool, receiving what amounts to two paychecks from the state is absolutely hypocritical," added Sam Roecker, the Democratic Party spokesman.

More than 7,000 public workers were receiving both pensions and salaries as of June 30, 2010, according to the Iowa Public Employees' Retirement System. Retired workers who return to public employment and are under age 65 have their monthly retirement earnings reduced by 50 cents for every dollar they earn over $30,000 under Iowa law.

But elected officials were exempted from that reduction under a provision included in an overhaul of IPERS that was passed with broad support in the Legislature and signed into law by Branstad in April 1992, according to the Legislative Services Agency.

That means the 64-year-old governor will not have his monthly benefits reduced this year. Without that exemption, Branstad's pension income would have been mostly wiped out before he turns 65 in November because of his salary. For all workers ages 65 and older, retirement earnings are not affected by the size of their salaries.

Former Democratic Rep. Eugene Blanshan, a sponsor of that 1992 measure, said the provision was meant to allow retired public workers to run for the Legislature without facing financial penalties.

"It was done mainly to open up the way for people that have collected IPERS as teachers, county supervisors and hospital staff members to be able to serve in the Legislature," he said. "We certainly didn't imagine the governor doing it."

Critics of Branstad's arrangement note the state last year banned 2,000 workers who accepted early retirement incentives from returning to service because of abuses in which employees retired and returned almost immediately to other jobs to earn pensions and salaries. The practice of "double-dipping" has come under fire across the nation as cities and states look for ways to save money and respond to complaints about public employees' pay and benefits being out of line with the private sector.

Branstad himself used such rhetoric during last year's campaign, questioning whether Iowa's retirement benefits were too burdensome for taxpayers. In his budget address last month, he called for "significant immediate shared sacrifice" with cost-cutting measures across state government.

Ken Sagar, president of the Iowa Federation of Labor, said he did not fault Branstad for collecting pension benefits he had earned. But he questioned why the governor was allowed to "double-dip" while recent state retirees could not do the same.

"It's a parenting model that says 'do as I say, not as I do'," he said.

Albrecht said it was ridiculous to compare the two. He noted that employees who took early retirement last year received $1,000 per year of employment, up to $25,000, and health benefits for five years.

Branstad's tax return for 2009, released during the campaign last April, showed he reported nearly $52,000 in income for a state pension reflecting his service between 1973 and 1999. Monthly benefits stay the same in the IPERS system but retirees receive a lump sum payment every January instead of a cost-of-living increase.

Albrecht said the precise value of Branstad's 2010 pension would be released in April in his tax return.

Branstad was one of three former governors elected to their old jobs in November. Gov. John Kitzhaber of Oregon stopped collecting his pension the day he was sworn in because state law prohibits collecting both, a spokeswoman said. In California, Gov. Jerry Brown said during last year's campaign he was not yet collecting a state pension.

Branstad's return to the governor's office will also boost his future pension earnings, which increase for years of service and are based on a worker's highest three years of earnings. Branstad's salary was $105,000 when he left the governor's office in 1998.

Albrecht said Branstad has learned since taking office that he cannot voluntarily give up any future pension increase, and he would support legislation enabling him to do so.

"He does not believe it's right for state employees to be able to double-dip into a retirement fund like that," he said.