Bonus plan for banking officials draws fire
Posted May 27, 2009
Updated May 29, 2009
Raleigh, N.C. — State lawmakers on Wednesday criticized a program in the state Office of the Commissioner of Banks that pays workers annual bonuses equal to 5 to 10 percent of their salaries.
Seventy-two of 90 workers in the office received bonuses last summer totaling $478,081 – 13 managers were ineligible for bonuses – and the office has another $200,000 in its budget for the 2009-10 fiscal year for bonuses.
"I think we were a bit appalled and caught off guard because we weren't expecting to see any performance bonuses in this economy," said Rep. Pricey Harrison, D-Guilford.
Although the Commissioner of Banks is funded by assessments from the state-chartered banks, mortgage companies and other financial institutions the office regulates, lawmakers still have oversight of its operations as part of the overall state budget.
"Right now, we're cutting everyone's salaries, and there's just no room for performance bonuses," said Harrison, who proposed legislation to do away with the bonus program.
Gov. Beverly Perdue last month ordered a 0.5 percent pay cut for state workers to help balance the 2008-09 budget, and lawmakers are weighing deep cuts to all state agencies to erase a growing deficit in the fiscal year that starts in July.
Commissioner of Banks Joe Smith said his employees received the state-mandated pay cut, but he said he hopes the bonus system will remain in place.
"We were trying to do the right thing. We're trying to make state government better," Smith said.
Lawmakers approved the bonus system in 2005 to help the office attract and retain top-flight talent.
"We weren't doing it with taxpayer money, and we've done it under supervision," Smith said.
The bonuses amount to about 4 percent of the office's $12.5 million annual budget, officials said.
Still, Harrison said, doling out bonuses in a tight budget cycle doesn't send the right message to the public.
"It just was not a Kosher mood, and we felt like they ought to be treated like everyone else," she said.
The state Department of Insurance and the North Carolina Education Lottery also receive no funding from the state budget, and DOI officials have argued unsuccessfully that they should be exempt from state cuts. Lottery officials have said they would do what the state asked.
"I hope, really frankly, that one day, when we work our way out of this current situation, we can work toward the same kind of benefits for every state employee, not just for us," Smith said.