Bill to limit lucrative buyouts fails in House committee
Payout to Couture inspired bill on golden parachutes
Lucrative buyouts for university presidents who are forced from office may offend the taxpaying public, but a legislative panel decided Tuesday that trying to limit them would make New Mexico less competitive.
The House Labor and Human Resources Committee blocked a bill that would have capped severance checks for university executives and other well-paid employees of state agencies at $110,000.
Only Rep. Sheryl Williams Stapleton, D-Albuquerque, voted to keep the bill alive. The rest of the House Labor and Human Resources Committee blocked it.
The bill was aimed at cases such as one last fall at New Mexico State University, where school regents approved a $453,000 buyout for school president Barbara Couture, above, in exchange for her resignation.
Couture’s annual base salary was $385,000, and she already had another job when the NMSU regents agreed to pay her to leave.
“We shouldn’t pay people more not to work than to work,” said Sen. Daniel Ivey-Soto, D-Albuquerque, one of the sponsors of the failed bill.
His cosponsor, Republican Rep. Bill Rehm, right, also of Albuquerque, has tried for years to stop the practice of universities and other state agencies providing golden parachutes to their top-salaried employees.
This year, Rehm and Ivey-Soto took a different approach in that they wanted to restrict the amount that could be paid to an employee of a state agency with a buyout provision in his contract.
But the labor committee made short work of the bill, stopping it dead on a 7-1 vote.
House Speaker Ken Martinez led the opposition, saying he did not like the bill.
“It’s not real world,” Martinez said.
He said it would hinder universities trying to hire presidents, medical doctors and coaches.
Under the bill’s terms, Martinez said, the University of New Mexico would never be able to land a dean for its medical school. No physician would give up a practice for the uncertainty of a university job that could see him fired by a governing board and given relatively little severance, Martinez said.
Hundreds of jobs on campuses and in other state agencies could have been affected by the bill, he said.
It would have capped buyouts at $110,000 because that is the governor's salary. An employee who made less than that amount would have received no more than his annual salary in a buyout.
Ivey-Soto said this system only would have applied to contracts in which a buyout provision was included.
He did not accept Martinez’s argument that New Mexico would have a harder time attracting talent to its universities or state agencies by limiting buyouts.
Universities, for instance, could still pay any salary they deemed fit for a president, another top-tier administrator or a basketball coach, said Ivey-Soto, right.
The difference would be that when a relationship went bad, such as the one between NMSU’s regents and Couture, taxpayers would be protected, he said.
Martinez challenged that claim.
If a university president or other school administrator has a contract and is pushed out by a governing board, taxpayers still would be on the hook to pay off the balance, said Martinez, an attorney.
Ivey-Soto, also a lawyer, said that was not necessarily so.
Under civil law, he said, NMSU would have owed Couture less than it paid her because she already had landed another job. NMSU should have been liable only for the difference, if any, between her new salary and what she was due contractually, he said.
Nobody from the public opposed or supported the bill, not even university lobbyists.
Ivey-Soto and Rehm said they had talked to staff members of the University of New Mexico about the bill, and they were neutral on it.
One reason, Rehm said, is that the bill would not have had any effect on high-profile coaches. Their salaries generally come from donors, not the taxpaying public, so no limit would have been imposed on separation agreements.
To try to pass the bill, Rehm and Ivey-Soto also excluded public school superintendents from buyout limits. Ivey-Soto said he hoped a narrowly focused proposal would clear the Legislature.
He said no particular case inspired the bill to cap buyouts at $110,000.
“There have been so many,” he said.
The proposal was House Bill 251.