A MESSAGE FROM ASSOCIATION PRESIDENT RALPH WHITE

To All Members, Regretfully, our attempt to increase the $12,000 COLA base to $16,000 for members of the State and Teachers’ Retirement Systems did not achieve success this year. Although the House and Senate enacted legislation, which would have extended the base to $16,000, the bill was returned to the Legislature by Governor Patrick with an amendment that extended the base to $16,000 only for retirees with annual pensions of under $40,000. Before being sent back to the Governor, the Legislature added a further amendment that would exclude pensions of over $40,000 from the $16,000 base, but only for one year. After a one-year sunset provision, the $16,000 base would have been effective for all pensions. The Governor then vetoed the bill, saying it did not include his “compromise language” and expressed concern about adding significant costs to the Commonwealth’s large unfunded liability. Since at the time of the veto the Legislature had adjourned from formal session for the remainder of the year, there was no opportunity to override the veto. This could only be accomplished in a formal session.

In analyzing our strategy, we had maintained our fundamental principle of not discriminating against any of our members, and to have accepted the $40,000 limit would have discriminated against those retirees, even though a minority of our members. We also feared that if this type of means test were to take hold, it could then be used in determining health insurance contributions and with a far lower threshold. This was an unpopular decision with the majority of our members, whose pensions are less than that amount. I understand and respect their criticism. Because the votes in the House and Senate were unanimous votes in favor of a $16,000 base without a pension limitation, we felt that an override would have taken place. At the time we made the commitment, there was time for this to happen in a formal session. However, as events transpired, time ran out. Hindsight is 20-20, and in retrospect although our decision was in keeping with non-discrimination among our members, it can be argued that it was the wrong decision. But, we must move on and make certain that new COLA base legislation is enacted and signed by the Governor in the coming legislative session.

Please note that the September edition of the Voice, our Association publication, went to press at the time the COLA bill was on the Governor’s desk, and we were optimistic of his signing the measure. This message is a correction of the Voice that you will receive shortly.

The September Voice also clarifies why local government retirees were not included in this legislation. We made every attempt to enact a home-rule bill on behalf of our city, town, county and district retirees, who comprise about fifty percent of our membership, with the same language as the state and teachers. This was approved by the Senate as an amendment to the legislative section of the Commonwealth’s budget, the most expeditious way of moving this bill, but was rejected by a House-Senate Conference Committee after a massive opposition lobbying effort by the Mass. Municipal Association, mayors and other local officials – and, of course, the press, which came down hard on both the state and local COLA bills. To our local members, rest assured that we will continue our push for the home-rule bill during the next legislative session. And, this time we intend to win.

Also, the Labor Department’s Bureau of Labor Statistics has just reported that the Consumer Price Index (CPI) for urban wage earners has increased by 6.2% in the twelve-month cycle, which began last October. With two months remaining in the cycle, August and September, it seems certain that the CPI will be at least 6% or as high as 7% for the year. This is the figure that will be used for increases in Social Security checks next January. This is the most compelling reason why public retirees of our state must have relief from our overly-restrictive COLA law.

As summer winds down, I want to wish all members a happy and safe Labor Day weekend, which is just around the corner. Thank you for your continued loyalty and support.

Warmest personal regards,

Ralph White

President
Retired State, County and Municipal Employees Association of Massachusetts

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