Legislative Report

Report 09-15
May 7, 2009

LEGISLATURE PREPARES FOR CROSS-OVER

Next week should prove to be one of the busiest of this session as both House and Senate consider bills that are subject to the May 14 cross-over deadline. By legislative rule, all bills introduced in House or Senate that do not involve appropriation of state or local funds, raise taxes, or impose fees must be passed by the originating house and sent to the other legislative chamber.

The General Assembly received an update this week on state revenue collections through April and the news was not good. Staff of the Fiscal Research Division informed legislators that actual state income tax collections were 40% lower than projected. Generally, state revenues for the current year would be 10.8% below last year. The projected deficit for next year has grown to $4.6 billion.

LOCAL COLA BILL MOVED TO APPROPRIATIONS

As expected, House Bill 934 was re-assigned this week to the House Appropriations Committee because the bill involves the expenditure of undistributed gains from the Local Governmental Employees Retirement System (LGERS). The bill would authorize a 1.0% Cost-Of-Living Adjustment for retired local government employees that would become effective July 1. Since this bill involves the spending of monies in LGERS, it is not subject to the May 14 cross-over deadline. We expect that the House Appropriations Committee will resume work on the state budget after the May 14. The 1.0% local COLA could be incorporated as a provision in the budget bill.

Please contact your Representatives in the House after the May 14 deadline and ask that they support the inclusion of the 1.0% local COLA in the House version of the budget. This 1.0% increase will be paid by funds already available in the local retirement system. The COLA does not require any state funding and it has the support of our Association, the League of Municipalities, and the Association of County Commissioners.

Both the House and the Senate pensions committees met on Wednesday and acted upon several bills of interest. The House Committee on Pensions and Retirement approved House Bill 751 which adds the Coastal Regional Solid Waste Authority to the list of local government units that are authorized to join the State Health Plan. The bill was re-referred to the Appropriations Committee.

The Senate Committee on Pensions, Retirement, and Aging approved the two bills described below.

Senate Bill 133: Registers of Deeds Pensions
This bill changes the method of calculating the maximum monthly benefit by including any payments received by the retiree from the Local Governmental Employees’ Retirement System. The Committee adopted a committee substitute that makes clear that this new method does not apply to the benefits of any current retired or serving registers.

Senate Bill 645: Retirement System Technical Corrections
The bill makes a variety of technical changes to the statutes governing the operation of the retirement systems. These changes were requested by the State Treasurer.

STATE HEALTH PLAN – BENEFIT CHANGE CHART

Our Report of last Friday included a summary of Health Plan changes enacted by Senate Bill 287 and referenced an attached chart. Unfortunately, the chart would not transmit.

You can view the chart at the State Health Plan web page (www.shpnc.org) by going to the Annual Enrollment Materials and opening the Annual Enrollment Kit for Retirees, Public Schools, Community Colleges, etc. We apologize for any inconvenience.