MONTGOMERY – Signaling the beginning of the end for the state’s luxury, “Rolls Royce” benefits plan for government workers, the Alabama House of Representatives today voted to repeal the Deferred Retirement Option Plan, or DROP. The House vote gave the bill final passage in the Alabama Legislature, and it will now be transmitted to Governor Bentley for his signature.
House Speaker Mike Hubbard said repealing DROP is the right thing to do in order to build a sensible bonus structure that will allow the state to attract and retain the “best and brightest” classroom teachers and essential public employees. But a “come one, come all” luxury benefits plan like DROP was excessive, unnecessary and counter-productive to the state’s educational goals.
“We’ve discussed the issue at length and reached the simple conclusion that we need to do away with DROP and start over,” Speaker Hubbard said. “Extending DROP by even a matter of weeks could cost hundreds of classroom teachers their jobs. Laying off hundreds of teachers just to salvage a luxury benefits plan is wrong. I look forward to exploring a new way to provide incentives that encourage the highest-caliber classroom teachers and public servants to come to Alabama, and to stay here. That’s not what DROP did.”
DROP incentivizes government workers to delay retirement by allowing them to participate in a luxurious benefits plan in the latter part of their careers. According to the Legislative Fiscal Office, DROP costs taxpayers $58 million annually in additional benefits to government workers who work beyond retirement age. Participation in DROP is based only on age and duration of employment, not performance or any qualitative measure of service.
Opponents of repeal have called the proposal “an attack on teachers,” and “anti-public employee.” However, recent reports have shown that high-ranking administrators and public sector union bosses – not teachers – have benefited the most from the program. In addition, repealing DROP allows the state to avoid public sector layoffs, including those of teachers.
“We knew this Legislature would have some difficult choices to make,” Speaker Hubbard said. “We will not shy away from making these tough choices because that’s what we were sent to Montgomery to do. We must set priorities and ensure that taxpayers’ money is being spent wisely on programs that work. That’s what the people of Alabama expect of us, and that’s what they deserve.”