Gov. Bill Richardson has unveiled a plan that would halt the practice of double dipping by public employees in the future.

However, his proposal wouldn't apply retroactively to workers who currently receive both a paycheck and retirement benefits. It would allow public employees who retire to return to work after a year but they couldn't collect retirement benefits on top of a salary.

The governor's decision comes months after he vetoed a measure that would have eliminated the practice for current employees.

Rep. Lucky Varela, D-Santa Fe, carried that measure, which was approved by the House and Senate earlier this year. He said Wednesday he's waiting to see details of Richardson's plan but that it appears the main difference is the governor wants the bill only to apply to future hires.

"He apparently wants to protect his colleagues and friends there who are working for state government and he doesn't want to affect them," Varela said.

More than 2,000 public employees at various levels of government now receive both paychecks and benefits from the public retirement system, to which employees and government employers both contribute.

If Varela and his colleagues don't like Richardson's proposal, they could still move to override his veto. "If they don't think his bill goes far enough," Varela said, "we'll take a poll in the Legislature and go from there."

The issue surfaced in this year's regular legislative session amid complaints from workers about morale suffering when retirees left jobs and soon returned — nixing the chances of advancement for lower-rung workers. Under current law, retirees must sit out 90 days before returning to work.

It also became a front-burner issue as the state plunged deeper into a fiscal crisis, with critics saying New Mexico simply cannot afford the practice anymore.

Estimates vary on how much the state would save by nixing double dipping but the figures are in the millions of dollars. One of the top earners, a Department of Finance and Administration division director, receives $177,629 a year — $102,900 in salary and $74,729 in pension payments through the Public Employees Retirement Association, records show.

Although he vetoed Varela's bill, Richardson said he had wanted changes to the system all along.

"Earlier this year, I said that I wanted to see the rules allowing for double dipping changed. Unfortunately, the bill lawmakers ultimately sent me raised serious legal issues and I had no choice but to veto it," Richardson said in a statement. "I moved forward by ordering a thorough review of our return to work rules to analyze their costs, effectiveness and fairness. Today I am proposing responsible reforms that will save the state millions of dollars as well as address concerns of fairness and employee morale."

Lt. Gov. Diane Denish, meanwhile, has also called for an end to the practice.

"She would eliminate all double dipping except for mission-critical staff that are absolutely necessary to fill, such as public safety," spokeswoman Sam Thompson said. "Nobody should be allowed to game the system and take advantage of taxpayers."

Richardson today has to make another decision about state employees.

He needs to decide on a Legislature-approved measure that would cut from the payroll 102 positions that are exempt from state personnel rules on hiring and firing. About 60 of those positions, which serve at the pleasure of the governor, are vacant. He is expected to take action on a series of budget-cutting measures at noon.

Contact Kate Nash at 986-3036 or knash@sfnewmexican.com. Read her blog at www.greenchilechatter.com.