Legislative Report #08-01

Report # 08-01
May 12, 2008

Legislature Convenes Tomorrow

The General Assembly reconvenes at 12:00 Noon on Tuesday, May 13th. This is expected to be a relatively short legislative session for several reasons. First, there is a limit on the introduction of new legislation that does not affect the state budget as is traditional in short session years. Second, the state’s revenue collections are beginning to reflect the economic slowdown and there will not be much available to fund budget adjustments, COLAs, or new initiative. Finally, this is an election year and legislators who are seeking re-election will want to resume their campaigns as soon as possible. In all likelihood, the General Assembly will finish the session by mid-July.

Governor Easley previewed his 2008 budget recommendations today in a press conference. He proposes a mix of base budget expenditure reductions and tax increases (cigarettes and alcoholic beverages) to cover the proposed expansion items. The Governor’s proposals include only a 1.2% COLA for retired teachers and state employees. Historically, the Governor does not make a recommendation regarding COLAs for local government retirees since no state funding is involved.

Challenge For Retirees

We have our work cut out for us this year. We are seeking 4.1% Cost-Of-Living Adjustments (COLAs), equal to the rate of inflation, for both retired state and local government employees. Neither the Teachers’ and State Employees’ Retirement System (TSERS) or the Local Governmental Employees’ Retirement System (LGERS) have sufficient gains to cover a 4.1% COLA. TSERS has only enough to fund a 1.28% raise and the local system has only enough for a 2.17% COLA.

In order to assure funding for a 4.1% COLA, the General Assembly would has to appropriate an additional $115 million to TSERS and require local governments to increase the employer contribution to LGERS from 4.8% of payroll to 5.1%. Convincing the General Assembly to take these two actions will be very difficult given the economic environment of this short legislative session.

Contacting Your Legislators

We believe that members of the General Assembly do pay attention to what their constituents have to say. We urge all of our members to contact their members of the General Assembly and make the case for a decent retiree COLA this year. Although we have received COLAs every year during the past 5 years, these raises have not kept pace with inflation. Given the soaring cost of gas and food, retirees need a COLA that matches the rate of inflation.

You can reach your legislators when they are in Raleigh by mail, telephone, and e-mail. The General Assembly web site (www.ncga.state.nc.us) includes office addresses, telephone numbers, and e-mail addresses for all members of the Senate and House.

Welcome to New Participants

Welcome to all of you who are receiving this Legislative Report for the first time. Nearly 2,000 of our members signed up through our recent member survey to receive our weekly electronic Legislative Report. We now have over 4,000 members who receive the Report.

We will transmit the weekly edition of the Legislative Report every Friday while the General Assembly is in session. When necessary, we will send special reports on fast-breaking legislative issues.

We welcome your input on the weekly Legislative Report. Please let us know how it might be improved in terms of content, coverage, and frequency. You can send your recommendations to: ed@ncrgea.com and indicate Legislative Report in the subject line.