Arizona pays state workers for cost-cutting ideas

PHOENIX - The state of Arizona will now play state employees to find ways to cut costs and save taxpayers money.

Lawmakers passed HB2464  last session.

State Representative Rick Gray said if state workers come up with a way to cut costs they get 10% of the savings.

“We're looking at taxpayer money so anything they can do to help us save money helps us save that taxpayer money,” said Gray.

“If somebody could have a $10 million savings they would get a million dollars but the bottom line is the taxpayer would save 9 million,” said Gray.

Gray said the state has tried the concept before but called it ineffective because the payouts were small.

Gray also said the reward money used to come out of the State’s General Fund. However, it but will now come from the savings the state generates from the employee’s idea.

Gray said he came up with HB2464 based partly on the success of a similar program the city of Phoenix uses.

Andy Terrey, a Phoenix Water Services Department employee,received a check for $2300 after he and six of his co-workers saved the city $3 million on a project to improve the city’s water quality. Each of his co-workers also received a check for the same amount.

“We don't get bonuses. That's the way it is and so you're always trying to think of way to make your life better and to make more money and this is a vehicle to do it. It's a nice big carrot,” admitted Terrey.

According to the city of Phoenix, it has awarded more than $97,000 to 103 employees from fiscal year 2007/08 through September 2012.

The city estimates employee ideas saved more than $9.7 million in that timeframe.