State Workers Run for the Exits

Last year, Teri Essex, an elementary school teacher in Elk Grove, Calif., had a choice to make. Work for another year—which, after state budget cuts, meant a lower salary, larger class size, and less money for supplies—or accept $56,000 from the district to retire a year ahead of schedule. Essex, 60, took the money. "The financial buyout was a no-brainer," says Essex, who estimates she will give up about $300 in monthly pension benefits by forgoing the extra year of work.

California is one of many states seeing double-digit increases in retirement applications from public employees like Essex. States across the U.S. are grappling with budget deficits totaling more than $540 billion since 2009, according to the Center on Budget and Policy Priorities, and many legislatures have passed or are considering bills that would cut the pay of public workers, raise the amount they contribute to their benefits, or require furloughs. Some states, including New York, are offering inducements for their employees to quit.