NCRGEA Logo NCRGEA Logo
 

Legislative Report #06-04

Report 06-04
May 26, 2006

SENATE BUDGET DISAPPOINTS!

The Senate passed the amended budget for 2006-07 on Thursday, May 25. The Senate’s bill was sent to the House which should begin consideration of the budget next week.

The Senate budget falls short in terms of Cost-Of-Living Adjustments for retired teachers and state employees. The Senate approved a 3.0% COLA, well below the 5.0% given to active state employees and less than the 3.7% recommended by Governor Easley. The 3.0% COLA is funded with a $ 27.1 million appropriation to supplement gains available in the Teachers and State Employees Retirement System.

The Senate did not address the COLA for retired local government employees. The Senate opted to allow the Board of Trustees of the Retirement Systems to approve the COLA for local retirees since the General Assembly does not appropriate any money for the Local Governmental Employees Retirement System. The Board already has recommended a 2.8% COLA for local retirees, the highest percentage that can be supported by the gains available in the local system.

The Senate budget includes $30 million to partially repay the state retirement system for funds that were withheld in 2000-01. This is the same amount recommended by the Governor and it is the fourth installment of a 5-year repayment plan.

There were several other retirement-related provisions included in the Senate budget. These are described below.

  • Firemen’s and Rescue Squad Workers’ Pension Fund: Increase the monthly benefit from $163 to $165 effective July 1, 2006.
  • N.C. National Guard Pension Fund: Increase the maximum monthly benefit for current and future retirees from $150 to $160.

TAKE ACTION NOW!

Clearly, we are disappointed that the Senate did not provide a higher COLA for retired teachers and state employees. The budget bill now goes to the House for consideration.

We urge our members to contact their members in the House of Representatives and ask for their support to raise the COLA for 2006. This is our message. Retired state employees and teachers deserve the same consideration as active state employees. We ask the House to provide a COLA for 2006 equal to the 5% raise proposed for active employees or at least the 3.7% COLA proposed for retirees by Governor Easley.

You can obtain information on how to contact your House member at the General Assembly Web site (www.ncga.state.nc.us). Go to “House” under site navigation and then to Member List. By clicking on the name of your Representative, you will be taken to their individual page. Each legislator has office and home phone numbers and addresses listed. Also, their e-mail addresses are listed on this page.

It is especially important to contact your House member if you are represented by one of the co-chairmen of the House Appropriations Committee. These members are:

  • Rep. Debbie Clary
  • Rep. Jim Crawford
  • Rep. Beverly Earle
  • Rep. Edd Nye
  • Rep. Bill Owens
  • Rep. Wilma Sherrill
  • Rep. Doug Yongue

BILLS INTRODUCED THIS WEEK

Several important bills pertaining to retirement benefits and the State Health Plan were introduced this week as the filing deadline approached.

House Bill 2487/ Senate Bill 1861: Mandatory Cost-Of-Living Increases/Retirees
(primary sponsors: Reps. Bernard Allen, Womble, Lucas/ Senator Malone)

These are identical bills that would set the COLA for retired teachers and state employees at the same percentage as the salary increase granted to state employees. The NCRGEA supports these bills.

House Bill 2562: Retirement System COLAs
(primary sponsors-Reps. Bell and Wilson)

This bill authorizes a 3.4% COLA for retired teachers and state employees and a 2.8% COLA for retired local governmental employees.

House Bill 2241: Retirement Health Benefit Funds
(primary sponsor-Rep. Folwell)

This bill appropriates $208.4 million to cover future state obligations for the retired employee health benefits provided by the State Health Plan. New accounting rules issued by the Governmental Accounting Standards Board require states to disclose long-term actuarial obligations of post retirement health benfits.