LEGISLATIVE UPDATE

2007 JULY - Now a quarter of the way through the 2007-2008 Legislative Session, Massachusetts legislative leaders are evaluating a number of proposals that are “hot” issues to Association members.

Representative Jay Kaufman (D-Lexington) and Senator Ben Downing (D-Pittsfield), who together chair the Joint Committee on Public Service, have focused their Committee’s early attention to several issues of importance to the Association. Beyond taking action on the COLA base (see page 1), the Committee has also acted favorably on raising the minimum pension for career state employees and teachers, as well as allowing the same minimum as a local option (H2604). This minimum pension would be $15,000 for a retiree with 25 years service. We were somewhat surprised at the number of members who are eligible for this benefit.

Additionally, the Committee has held hearings on the Association’s legislation relative to disability retirement (H2453, H2510 and S1601) and the veterans definition (S1463). In July, hearings will be held on all bills pertaining to retiree insurance, including our bill reinstating the Medicare Part B reimbursement (S1604/1607). By late-July, hearings will have also taken place on the issue of applying the revised mortality table to pre-July1, 2004 Option C retirees (S1610) and various survivors bills (H2581 and S1588). A summary of our bills was contained in your May edition of the Voice.

While the committee process moves forward, a number of prominent legislators used the annual budget process to bring attention to issues of high interest to retirees. Senators Michael Morrissey (D-Quincy) and Thomas McGee (D-Lynn) filed amendments to the budget on two very important retiree issues – the Medicare Part B refund and the Option C mortality table. While the amendments were not included in the Senate’s final budget proposal, they kept these two issues in the forefront, with hearings on them later this summer.

“We continue to hear from members who have been hurt by the loss of the Medicare Part B refund, or whose pensions were unjustly lowered after taking Option C under the old mortality table,” explained Association Legislative Liaison Shawn Duhamel. “As frustrating as the slow progress can be at times, we are not giving up.”

In addition to the Public Service Committee’s action on our bills, the Joint Committee on Healthcare Financing, chaired by Representative Patricia Walrath (D-Stow) and Senator Richard Moore (D-Uxbridge), reported out favorably the Association’s local option legislation that would allow municipalities to establish a schedule for pre-funding the future healthcare costs of their retirees. At press time, our bill, (H1140), is in the final stages of passage (third reading) by the House, and it’s expected that the bill will go to the Senate for favorable action there. Also, Association bill (S1703) which exempts “non-contributory pensions” from state tax has been heard by the Joint Committee on Revenue and awaits further action.

Good News On The Budget

With the Senate passing its version of the state budget, we now know the major features that will be included the Fiscal ‘08 Budget package affecting public retirees, and there’s good news. At press time, Senate and House conferees were meeting to resolve the differences between their budget proposals and craft a compromise bill that will eventually be sent to Governor Patrick for his signature.

However, since all three versions of the budget – that proposed by the Governor, Senate and House – contained the following items, there’s no doubt that they will become law. First and foremost is a 3% Cost of Living Adjustment (COLA) for state and teacher retirees, beginning July.

To be eligible, a state or teacher retiree must be retired before July 1, 2006. It will be applied to the first $12,000 of one’s pension, meaning that the maximum Fiscal ‘08 COLA will be $360 yearly.

State retirees, who are insured by the state Group Insurance Commission (GIC) will see no increase in their premium contributions. Those, who retired on or before July 1, 1994, will continue to pay 10% of the GIC premium, while enrollees, retiring after July 1, 1994, pay 15%.

For this legislative session, we reintroduced our legislation (H2605) that establishes a state health insurance trust, in which funds are set aside to pre-fund future retiree healthcare costs associated with the GIC. See details about a the bill for cities and towns (H1140) above. All three versions of the budget agree with H2605 that a retiree trust fund must be established and should be irrevocable.

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