Legislative Report #08-04

Report 08-04
May 30, 2008

HOUSE BUDGET NEARS COMPLETION

This week, subcommittees of the House Appropriations Committee completed work on budget proposals for 2008-09. Also, it appeared that the leaders of the House Appropriations Committee have reached tentative agreement on a package covering state retiree COLAs and employee compensation.

There will be no official confirmation until next week when the committee debates the proposed budget. However, preliminary reports indicate that the House budget will include a 2.2% COLA for retired teachers and state employees. This represents a major step forward in our efforts. The higher COLA requires an additional $33 million in General Fund appropriations.

ON TO THE SENATE!

The House should be thanked for increasing the COLA above the level initially proposed by the Governor (1.2%). We now must turn our attention to the Senate and urge an even higher COLA in the Senate version of the budget. Please contact your Senators this week and request their support.

BILLS INTRODUCED THIS WEEK

May 28 was the final deadline for introduction of new legislation during the current short session. Several bills of interest to retirees were formally introduced before the deadline. These are summarized below.

Senate Bill 2132/ House Bill 2772: Enhance TSERS Benefits/Retirement COLAs
(Primary Sponsors – Sen. Dannelly/ Reps. Bell and Harrell)

These are identical bills that would implement the recommendations of the Retirement Systems Board of Trustees for 2008. These include:

• COLAs
  Effective July 1, 2008, a 4.1% COLA for retired teachers, state employees, members of the Consolidated Judicial Retirement System, and retired state legislators. Retired local government employees would receive a 2.1% COLA.
• State Retirement Accrual Multiplier
  The accrual multiplier that is used to determine the amount of monthly pension for retiring teachers and state employees would be increased from the current 1.82% to 1.84%. This reflects an effort to increase the state multiplier to the level of the Local Governmental Employees’ Retirement System multiplier (1.85%) over the next two years.

House Bill 2758: Investment Authority to the Retirement Board
(Primary Sponsors – Reps. Coleman, Wainwright, Dollar, Hurley)

This bill would strip the decision making authority for investment of state and local retirement systems funds from the State Treasurer. The authority would be transferred to the Retirement Systems Board of Trustees. Our Association strongly opposes this bill.

Senate Bill 2158/ House Bill 2786: State Health Plan – Local Government Participation
(Primary sponsors – Sen. Rand/ Rep. Holliman)

These are identical bills that would authorize local governments to participate in the State Health Plan on a voluntary basis and would set uniform requirements for such participation. Local units would have the option of including retirees in the Plan on a non-contributory, partially contributory, or fully contributory basis. Local governments seeking membership in the State Health Plan would be subject to review by the Executive Administrator of the Plan.