House FY23 Budget Contains 3% State and Teacher COLA

House FY23 Budget Contains 3% State and Teacher COLA

Amendments Filed to Improve COLA Benefits 

APRIL 19, 2022: On Wednesday the House released their version of the Fiscal Year 2023 state budget. This marks the next stage of the budget process, which began in January when Governor Baker filed his proposal. The $49.6 billion dollar budget included two items of significance to retirees. First, as in the Governor’s proposal, the House fully funded the Group Insurance Commission, making sure health insurance will once again remain stable. 

The FY23 proposal also included a 3% cost of living adjustment (COLA) for retired state and teachers who retired before July 1, 2021. As we have been reporting since last fall, we have been focused on taking steps to improve the COLA benefit for retired state employees and teachers as well as retirees at the local level. Unlike prior years, when making improvements to benefits would have been potentially unsustainable for the system, unprecedented pension fund investment returns now make it the time to act.

A key part of the budget process is that members of the respective branch file amendments to the proposal, in this case H.4700. On Friday we worked with Representative Ken Gordon (D-Bedford) and Representative Mark Cusack (D-Braintree) to file two amendments that seek to improve COLA benefits on behalf of the Association. 

Representative Gordon, who is also the House Chair of the Joint Committee on Public Service, filed amendment #1136 which would increase the COLA for retired state and teachers to 5.9% for FY23 – the amount of the federal CPI. The amendment also includes language that would allow local retirement boards to increase their COLA up to 5.9% for FY23. The 5.9% is reflective of the Social Security COLA that was paid in January of 2021 to those who receive Social Security benefits. 

The second amendment, #1411, filed by House Revenue Committee Chairman Mark Cusack, would increase the COLA base for those in the state and teacher system. As members know, the annual COLA is applied to the set base, in the case of the state and teachers’ system it is currently at $13,000. The base has not been raised since 2011. The language in the amendment would increase the base in increments of $1,000 over the next three fiscal years arriving at $16,000 on July 1, 2024.

Mass Retirees is now working with the amendment sponsors to add House cosponsors to both measures. House debate is set to take place during the last week of April. We will be monitoring debate as it takes place and will provide membership with updates as they become available.

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