Governor Jan Brewer signed a bill last week reversing increased state employee retirement contributions that have been deemed unconstitutional.

In 2011, the state legislature passed a cost-cutting measure that changed the 50/50 ratio paid by the state and its employees for costs associated with the Arizona State Retirement System. Under the change, the state reduced contributions to 47 percent, leaving employees to pay the other 53 percent of the cost of contributing to the state’s largest retirement system.

The measure lawmakers took last year in an effort to balance state budgets was found to be unconstitutional, prompting legislators to pass a new bill reversing the 2011 law.

The new law, which passed the Senate in late April, requires public employers to reimburse employees for the extra three percent they contributed, retroactive to July 1, 2011.

Public employers in Navajo County received word of the new law early last week and are calculating what the tab for reimbursing employees will be.

Navajo County Finance Director James Menlove said the county could pay employees up to $105,000, but he anticipates the actual cost will be less.

Menlove said employees who were hired after the 2011 law took effect will not be reimbursed, nor will those who left the county’s employment prior to the new law reversing the policy.

Northland Pioneer College Vice President of Administrative Services Blaine Hatch said the community college will have to pay about $75,000 to reimburse employees.

The new law dedicates $40 million to reimburse some state employers and school districts for the cost of the payback plan. Hatch said NPC won’t receive any of the newly appropriated funds, explaining that money is reserved for those institutions that were required to send their “savings” from reduced retirement system contributions to the state, which NPC didn’t do. Neither did many communities, including Snowflake and Holbrook, which will have to pay about $10,000 and $7,200, respectively, to reimburse employees. The City of Winslow had not figured its reimbursement costs at press time.

The judge’s ruling required public employers to reset the retirement cost contributions to 50/50 by late April. Employees must receive reimbursement checks by Sept. 30.