The Legislature plans to hold off on passing the FY’02 State Budget until after September economic reports are complete. House Speaker Thomas Finneran, Senate President Thomas Birmingham, and Governor Jane Swift are fearful that the budget, as it currently stands, maybe several hundred million dollars out of balance.

While House and Senate budget conferees continue to wrangle over the Fiscal 2002 state budget, state and teacher retirees patiently wait for their 2001 COLA. When passed, it will take effect retroactive to July 1.

Local government retirees – city, town, county, authority, district – received their COLA in July by a vote of their retirement boards. State and teacher retirees will ultimately receive the same COLA retroactive to July when the budget is passed and signed by the Governor. The COLA is not jeopardized because of the delayed budget.

“Since an annual 3% COLA is assumed within the Commonwealth’s pension funding schedule and has already been approved by the governor and both legislative branches, passage of the increase is not in question,” explains Association President Ralph White.

If the budget is signed by mid-October, the retroactive payments will be in the October checks. The same schedule applies if the budget is later signed before mid-November, when there will be a catch-up COLA in that month’s check.

With the economy in a flux and the budget undergoing revisions, Legislative leaders have also placed an unofficial moratorium of sorts on the passage of most legislation. Bills that would add to the Commonwealth’s bottom line are at a virtual stand-still.

Since the majority of the bills contained in the Association’s legislative package contain a cost that the state would be required to bear, the status of our 14 bills remains unchanged from what was reported in the September Voice. In addition, with local governments bracing for cuts in local aid, a hostile environment exists when it comes to local approval of new benefits, which would add costs to municipal budgets.

“What took place in September has changed everything. With all of the uncertainty that currently exists and a possible recession taking shape, the Legislature is being extremely cautious as to how they proceed,” said Association Legislative Chairman Bill Hill. “The current legislative leadership and the governor experienced the hardships of the last recession firsthand. They are determined not to repeat the same mistakes.

“This is not to say that the Association has given up on any of our bills. We are all going to have to exercise some patience while this problem is dealt with. It is a two year session and we have made great progress to this point. We are hopeful that the economic situation will improve over the next few months, allowing us to get back on track.”

On a brighter note, the Commonwealth’s Group Insurance Commission (GIC) is moving forward with efforts to create a retiree pay-all dental plan. Members will recall that a study, which attempted to develop a dental/vision plan this past year, proved too costly for most retirees to afford under the current contract.

As we go to press, the GIC is releasing a request for proposals (RFP) for a new dental provider for active state employees, which will take effect July 1, 2002. Included in the RFP is a provision to also develop a plan for retirees, as a rider of sorts along with the active employee contract.

“We will know more about what can be developed in the coming months, once the RFPs begin to come in. The goal is to design a plan that is affordable for our members,” said Association Legislative Liaison Shawn Duhamel. “An expensive plan, one that exceeds $60 a month for individual coverage, is not realistic. The approach the GIC has now taken should prove beneficial.”