Legislative Report

Report 09-19
June 5, 2009

BUDGET WOES PROMPT TAX DISCUSSION

The subcommittees of the House Appropriations Committee worked this week to complete the development of the House budget proposal. The subcommittee recommendations will be reviewed by the eight co-chairmen of the Appropriations Committee and presented to the full committee as early as next week.

The significant reductions in state funding for public schools, the university system, and a wide range of human services programs sparked rallies by a coalition of advocacy groups calling for state tax increases to offset some of the proposed budget reductions. Citizen organizations that are opposed to tax increases also held rallies in Raleigh during the week.

NO WORD YET ON LOCAL COLA

As we pointed out in last week’s Legislative Report, the decision on whether to include a provision in the House Budget bill authorizing a 1.0% COLA for local government retirees rests with the eight co-chairs of the House Appropriations Committee. We expect that they will reach a decision on this important issue sometime next week.

If you have not already done so, we urge that you call your Representatives in the House and ask that they let the co-chairs know that they support the inclusion of the 1.0% COLA. The raise for local retirees can be paid from gains currently available in the Local Governmental Employees’ Retirement System. It does not require any state funding.

Please let us know if you get any feedback from your House members when you contact them. We greatly appreciate the work of all who already have called or written your House members on this important issue.

On Tuesday, The Senate voted to concur in Senate Bill 703, State Treasurer Investments, as amended by the House. The Bill has been sent to the Governor for her signature.

This bill expands the range of investment vehicles that the Treasurer may use for investment of monies in the retirement systems and other funds that are managed by the Department of State Treasurer. The new options include investment instruments that are better suited to periods of economic recovery and rising inflation.

HOUSE COMMITTEE APPROVES SEVERAL BILLS

The House Committee on Pensions and Retirement gave favorable reports to two important bills this week. Both bills will be considered by the full House next week.

Senate Bill 632: Treasurer’s Governance and Transparency Act

This bill expands the Investment Advisory Committee from the current five to seven members. The committee is appointed by the State Treasurer who serves as chairman ex officio. Four of the members are selected from the general public and must have experience in areas relevant to the administration of a large diversified investment program, including but not limited to: investment management, securities law, real estate development, or absolute return strategies. The two remaining members are chosen from  the members of the Retirement Systems Board of Trustees.

Senate Bill 204: Retired Nurses Return to Work

This bill would permit retired nurses who are receiving a pension under the Teachers’ and State Employees’ Retirement System to return to work as nursing instructors without loss of retirement benefits. The following qualifications would apply:

1. The nurse must be retired under a full service retirement  (30 years of service at any age, 25 years of service and at least age 60, or 5 years of service and at least age 65.)
2. The nurse must be retired for at least 6 months before returning to work.
3. The nurse could not work more than 3 years under this provision.
4. The community college or university seeking to rehire retired nurses as instructors would be required to certify that there is a shortage of qualified instructors, have posted the vacancy for at least 2 months, and solicit applications through local news and other media.

The bill if approved by the General Assembly would become effective on July 1,   2009 and sunset on June 30, 2013.