Contract law

Prosecutor’s office embraces double dipping

GOVERNMENT | Bruce Rushton

While Gov. Bruce Rauner pushes for steep budget cuts throughout state government, at least one agency has figured out a way to cut payroll.

The Illinois State’s Attorneys Appellate Prosecutor’s office has at least two former employees who are still at work while collecting pensions. The agency has moved them to contractual status so that they can collect pensions while still earning as much as $5,200 a month under contracts with the office.

The employees-turned-contractors include a special prosecutor, Charles Zalar, and Isabel Jacobs, the administrative assistant to agency director Pat Delfino. In addition, the agency has a deal with Thomas J. Brown, former Livingston County state’s attorney, to work as a contract prosecutor.

Zalar’s contract pays him $5,200 a month; he is also collecting more than $101,600 in pensions from state and municipal retirement systems after retiring last year. Jacobs, who retired in 2011 and collects more than $34,700 a year in pension benefits, is paid $41.05 per hour under her contract, which brought her more than $30,000 in fiscal year 2014.

Brown, who retired in 2012, collects as much as $6,000 per month under his contract while also collecting an annual pension of more than $96,600. None of these contractual employees pay state income taxes on their pensions.

Delfino defends the practice and says that more contracts could be coming, particularly in the special prosecution unit staffed by 11 lawyers, at least two of whom were admitted to the bar in the 1970s and are nearing retirement age. The unit handles prosecutions when elected state’s attorneys have conflicts of interest or when state’s attorneys ask for help on complicated cases.

“We’re under budget constraints, like any other agency,” Delfino says. “This is a model we’ve developed, and we think it’s an effective and efficient model.”

Contracts save the prosecutor’s office the cost of health insurance and other benefits. Delfino says the cost savings now run into the six figures. Hiring full-time employees to replace retired prosecutors could force layoffs elsewhere within his office, he said, and the agency needs jack-ofall-trades prosecutors who can handle everything from murders to misdemeanor traffic offenses.

“We didn’t have the money for full-time people, and we need them,” Delfino said. “We’re not doing on-the-job-training that you would do in a line state’s attorney’s office.”

While the arrangement might save money for Delfino’s agency, it also has the potential to cost pension systems if employees who would otherwise stay on the job choose to retire and start drawing pension benefits while also working under contract.

“Unfortunately, this type of double-dipping is all too common in government,” Bob Reed, director of investigations and programming for the Better Government Association, wrote in an email. “It’s a practice that should be discouraged because taxpayers end up paying twice for the same employee.”

Not everyone, however, is against it. “I have always felt that the public outrage over double dipping is misplaced,” says Jeffrey Brown, a professor of finance at the University of Illinois College of Business in Champaign. “They could retire and they could sit at home and do absolutely nothing and they can draw the benefit. Or they can draw that benefit and we can have them do something useful: Enter the labor force. What job are they more qualified to do than the one they came from?” Brown cites a colleague whom he declined to name who retired at age 60. Retirement rules for state university employees are different than for other state employees, and so the retired colleague could not return to work under a contract.

“He’s still full of energy and loves teaching,” Brown says. “He’s not allowed to teach here because of this anti-double-dipping rule. He goes and he teaches at a public school in California and flies back and forth. He’s one of the best teachers we’ve ever had, and we’re depriving our own students of his teaching.”

The answer, Brown says, lies in changing the pension system, not banning contracts with former full-time employees.

“If you don’t want people drawing a pension and working, raise the retirement age and you’ll save real money,” Brown says. “What the antidouble-dipping rules do is, they don’t attack the problems, they attack the symptoms.”