By Susan Guyett
INDIANAPOLIS (Reuters) - Indiana Governor Mitch Daniels said on Friday that most state employees will receive a surprise bonus over the next few weeks, ranging from $500 to $1,000.
The Republican made the announcement one day after the state's auditor revealed that Indiana had ended the fiscal year with reserve funds of nearly $1.2 billion -- a level it was not expected to reach until 2013.
Daniels, who credited the unexpected balance to cost control efforts by state employees, called the one-time paycheck boosts "efficiency dividend" payments.
The actual amount workers will receive is based on the employee's last job evaluation. Those meeting expectations can expect $500, those who exceeded expectations will get $750 and outstanding ratings will merit $1,000.
About 24,000 of the 28,069 state employees will be eligible for the payments.
"I'm running out of ways to express my admiration and appreciation for all of your efforts and hard work, " Daniels wrote in a letter to his fellow state employees.
Representatives of organized labor welcomed news of the bonuses but said it didn't offset Daniels' continued opposition to collective bargaining by public employees.
"My kneejerk reaction is I'm happy for the state workers but that doesn't take away from the fact that he took their bargaining rights away," said Indiana Federation of Teachers president Rick Muir.
"It puts them in the position of someone being kind hearted every once and awhile."
State employees have not had collective bargaining rights since Daniels took office in 2005.
Both Muir and Indiana House Minority Leader Pat Bauer, a Democrat from South Bend, questioned how achieving the surplus has impacted public education.
"Our schools have paid a heavy price already: hundreds of millions of dollars in lost state support, cut at the governor's demand," Bauer said in a statement Thursday after Auditor Tim Berry announced the surplus numbers.
(Additional reporting by Karen Pierog; Editing by James B. Kelleher and Jerry Norton)