The Des Moines Register is reporting that the Iowa University system officials are using stimulus cash to pay people to retire early. I dont think this counts as jobs created or saved — nor will it help the employment numbers:
More than $43 million of federal stimulus money meant to save or create jobs is being spent on salaries and benefits for departing employees at Iowa’s three state universities.
The University of Iowa has directed $33.4 million in stimulus money to the salaries of employees taking early retirement or otherwise leaving the university by June 30. Iowa State University will use $5.9 million and the University of Northern Iowa $3.6 million on the salaries and benefits of employees who took early retirements.
University officials and others in the state are defending the move:
University officials defended their use of the stimulus money in that manner, saying the one-time cash infusion is wisely spent on temporary costs, rather than ongoing expenses that would have to be somehow funded or cut in the future.
“The money truly is saving jobs,” University of Iowa Treasurer Doug True said. “I know that. I believe it to the bottom of my feet.”
A range of other observers – including Ed Failor Jr., president of Iowans for Tax Relief – also supported the universities’ use of stimulus money to finance early-retirement packages.
While there may be a defense to be mounted regarding this use of stimulus cash — and it’s not clear that there is a good rationale — the stimulus’ primary function is to increase economic growth and create jobs. It’s pretty clear this does neither.
