CLT UPDATE
Sunday, August 3, 2008
Legislature hikes pensions for state workers
despite billions in cost
Massachusetts lawmakers, moving
quickly and without debate in the final hours of the legislative
session, approved a pension increase for state workers that could cost
more than $3 billion over the next 20 years, sparking criticism from
fiscal watchdogs who say the state cannot afford such a costly benefit.
The bill, which was strongly backed by unions in the midst of an
election year, would increase the annual cost-of-living adjustments by
about $120 per year for retired teachers and state employees, helping
them afford the spiraling cost of fuel and food, supporters say. But
because the number of eligible retirees is so vast - about 100,000 would
receive the benefit - the cost could reach $2.7 billion to $3.5 billion
by 2026, according to the Massachusetts Taxpayers Foundation, a
business-backed fiscal watchdog group.
"There is no money to pay for this enhanced benefit, regardless of the
merits," Michael J. Widmer, the foundation's president, said yesterday.
"It's another example of the administration and the Legislature passing
a benefit and simply passing the buck to a future taxpayer. . . . it's
the height of irresponsibility." ...
The boost for state retirees also comes at a time when cost-of-living
increases are almost unheard of for pensions in the private sector - and
private pensions themselves are becoming, in some ways, a thing of the
past....
The increase sailed through both branches on voice votes Thursday before
receiving final approval in the Senate about 9:30 p.m., just hours
before the end of formal sessions at 1:30 a.m. There was no opposition,
said a chief backer of the plan, Ralph White, the president of the
Retired State, County and Municipal Employees Association of
Massachusetts.
The Boston Globe
Saturday, August 2, 2008
Pension boost OK'd for state workers
Patrick signals support; critics rail at huge cost
Barbara Anderson's CLT
Commentary
Chip is on his solo-sailing vacation in Maine, so
I'm filling in for him.
Friday I was in-studio with Michael Graham for an hour; first
time I'd met him, it was fun. But I took the opportunity to
disagree with his and Jay Severin's joint campaign to "Dump the
Chumps," i.e., throw out all incumbents. If they all get
treated the same no matter how they vote, why should anyone vote
with us ever? I think we should focus on dumping the incumbents
who have voted against us on our income tax rollback and who
have challengers. If we can defeat just a few who don't respect
the will of the voters, we can perhaps scare all the other
incumbents who will want to repeal Question One if it passes.
Next I did two hours on that subject with Jim Braude (Margery
Eagan was on vacation); we made it clear that neither of us
formally represent the official campaigns, but were enjoying
having a tax debate with each other again. Most callers agreed
with a Yes on 1 vote. Jim asked if they would change their minds
if, this fall before the election, the Legislature passed some
reforms, especially on police details and pensions. I pointed
out that unfortunately for his plan, the Legislature just left
Friday at 1 a.m on a vacation that lasts til after the
election.
I'm sure the point was made further when the next day's Boston
Globe carried two stories on its front page.
Top left, "In the news": "The unemployment rate spiked again,
reaching its highest level in more than four years as employers
cut their payrolls..."
Same front page, top left: "Pension boost OK'd for state workers
- Patrick signals support; critics rail at huge cost."
As I said, Hell Yes on 1. This by the way is a bumper sticker
that was suggested by Peter Blute on his WCRN talkshow last
month when I was his guest by phone. It won't be Carla Howell's
official sticker, but I may have one made for MY car! because
that is exactly how I feel.
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Barbara Anderson |
The Boston Globe
Saturday, August 2, 2008
Pension boost OK'd for state workers
Patrick signals support; critics rail at huge cost
By Michael Levenson
Massachusetts lawmakers,
moving quickly and without debate in the final hours of the legislative
session, approved a pension increase for state workers that could cost
more than $3 billion over the next 20 years, sparking criticism from
fiscal watchdogs who say the state cannot afford such a costly benefit.
The bill, which was strongly backed by unions in the midst of an
election year, would increase the annual cost-of-living adjustments by
about $120 per year for retired teachers and state employees, helping
them afford the spiraling cost of fuel and food, supporters say. But
because the number of eligible retirees is so vast - about 100,000 would
receive the benefit - the cost could reach $2.7 billion to $3.5 billion
by 2026, according to the Massachusetts Taxpayers Foundation, a
business-backed fiscal watchdog group.
"There is no money to pay for this enhanced benefit, regardless of the
merits," Michael J. Widmer, the foundation's president, said yesterday.
"It's another example of the administration and the Legislature passing
a benefit and simply passing the buck to a future taxpayer. . . . it's
the height of irresponsibility."
The initiative comes at a time when state leaders are struggling to find
a way to fix dilapidated bridges, pay for the rising costs of the
state's healthcare law, and provide property tax relief to cities and
towns that have been forced to layoff workers and slash budgets. A
previous version of the bill would have been even costlier, requiring
municipalities to offer the same benefit to their retirees. Legislators
dropped that portion after an outcry from local leaders.
The boost for state retirees also comes at a time when cost-of-living
increases are almost unheard of for pensions in the private sector - and
private pensions themselves are becoming, in some ways, a thing of the
past.
Governor Deval Patrick has signaled his support and said in a statement
released yesterday: "At a time when fuel and energy costs are on the
rise, even a limited increase will help retirees living on a fixed
income."
Patrick, however, is still reviewing the details of the bill and has not
decided whether he will sign it, said his spokesman, Kyle Sullivan.
State pensions in Massachusetts are adjusted annually by the
Legislature, which for the past eight years has given a 3 percent
increase on the first $12,000 of retirement pay - or $360 each year.
Under the legislation, the increase next year would be granted on the
first $16,000 for workers with pensions of less than $40,000. The
following year, all retirees would have a base of $16,000, leading to an
annual bump of $480.
"While it may not be a lot, it's something," said Senate Minority Leader
Richard R. Tisei, a Wakefield Republican. "You have to treat the people
who have worked for the state for decades fairly - a lot of these people
worked in the '40s, '50s, and '60s, so they didn't make a lot anyway.
Most of their pensions aren't very large."
How much the legislation will cost depends on whether the Legislature
pays for the long-term cost of the benefit up front, a scenario that
most acknowledge is unlikely, or stretches out the payments over
decades.
The increase sailed through both branches on voice votes Thursday before
receiving final approval in the Senate about 9:30 p.m., just hours
before the end of formal sessions at 1:30 a.m. There was no opposition,
said a chief backer of the plan, Ralph White, the president of the
Retired State, County and Municipal Employees Association of
Massachusetts.
"In the Legislature itself? No," White said yesterday. "There were
varying opinions but no one opposed it. I think we did a god job of
lobbying, truthfully." The association estimated it would cost less than
$1 billion, in sharp contrast to the taxpayer foundation's estimate.
Both organizations said they based their estimate on a 2005 report by
the Public Employee Retirement Administration Commission. Widmer
acknowledged that the cost could be as low as $1 billion, but only if
the Legislature decided to pay for all of the annual increases up front.
Steve Poftak, research director at the Pioneer Institute, an independent
nonpartisan research group, said he was troubled that legislators never
had an open debate about whether the money would have been better spent
on education or roads and bridges.
"There's demand for spending on education and transportation
infrastructure, and what they've said is, 'We're going to allocate this
money for retirees,' " Poftak said. "I understand the impulse, but I
don't think they've thought through the financial implications."
Supporters said that over the last three decades, the cost of living has
far outpaced the adjustments made to retirees' pensions. The average
pension for a retired state worker is about $22,000 and for a retired
teacher about $32,000, White said.
Tisei said an increase was long overdue.
"This is something I feel that you have to do," he said. "It's probably
not the best timing, but state retirees traditionally have gotten the
short end of the stick when it comes to cost-of-living increases."
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