California state workers banked $3.5 billion of unused vacation time in 2017

An analysis has found an increasing number of California state workers are retiring with massive payouts for unused vacation and other leave, the Los Angeles Times reported Thursday.

The Times said its review of payroll data from the state controller's office shows the state paid employees nearly $300 million for banked time off last year.

Among them were more than 450 who took home six-figure checks, including a prison surgeon who received $456,002 and a transportation engineer who received $405,000 for time off that was never used.

Twenty employees with the biggest payouts last year received a combined $5.9 million and 17 received raises in the year before retirement. The newspaper's analysis found those raises increased the payouts by an average of $7,500 each.

In all, state workers had $3.5 billion in unused leave as of 2017, the most recent period for which data was available.

Vacation balances for most employees are supposed to be capped at 640 hours.

But the analysis found that sporadic enforcement of the rule and an increasing number of state workers retiring have led to a 60 percent rise in the number of six-figure payouts since 2012.

The data do not include legislative employees or institutions such as public universities, meaning the cost is higher. And total unfunded liability does not account for stockpiled days off used by employees at the end of their careers to remain employed while not actually working, which boosts the value of their pensions.

Joe Nation, a Stanford public policy professor, told the newspaper government mismanagement is responsible for the situation.

"It's like having a speed limit but not enforcing it," he said. "This is not a good way to run any organization."

Brian Ferguson, a spokesman for Gov. Gavin Newsom, countered that in recent years the state has made "significant strides" in reducing the unused leave balances.

Efforts to deal with the problem include offers by some departments to cash out up to 80 hours of time off each year. The strategy is intended to prevent even greater payouts when workers retire at higher salaries.

An effort by former Gov. Jerry Brown to reduce vacation balances led the state to pay out $111 million during a three-year period that ended in 2017.

KTVU reported this story from Oakland.