House and Senate conferees continued to meet through Friday in an effort to reach agreement on the state budget before the current resolution that provides for continuing operations of the state expires on July 15. Although both chambers have confirmed that progress has been made, it appears that the General assembly will need to extend the deadline by at least a few days. The House and Senate still seem to be at odds over the best approach to raising additional tax revenues to avoid deeper program reductions.
The latest unofficial reports concerning state employer contributions to the Teachers’ and State Employees’ Retirement System (TSERS) indicate that the final budget agreement likely will include appropriations for both years of the biennium. Both the House and Senate versions of the budget included $29 million additional funding in 2009-10 but the Senate did not include any additional appropriation for 2010-11. The compromise figure for 2010-11 may be in the range of $170 million.
A number of members have asked about the status of House Bill 934 which would authorize a 1.0% COLA for retired local government employees. We had attempted to have this bill included as a provision in the House version of the Budget bill. Unfortunately, House Appropriations Committee leaders felt that it would be inappropriate to include a local retiree pension increase in the state budget at a time when no other group of employees were receiving raises.
House Bill 934 remains in the House Appropriations Committee and is eligible for consideration. The bill sponsor, Rep. Russell Tucker has developed a proposed committee substitute that would provide temporary authority to the Board of Trustees for the Local Governmental Employees’ Retirement System (LGERS) to approve this COLA. This would avoid the need for direct action by the General Assembly. The text of the proposed committee substitute follows.
SECTION 1. Notwithstanding the provisions of G.S. 128-27(k), the Board of Trustees of the Local Governmental Employees' Retirement System may provide a cost-of-living adjustment not to exceed one percent (1.0%) from and after July 1, 2009, to the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 2008. Furthermore, from and after July 1, 2009, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 2008, but before June 30, 2009, shall be increased by a prorated amount of the allowable payable as determined by the Board of Trustees based upon the number of months that a retirement allowance was paid between July 1, 2008, and June 30, 2009.
SECTION 2. This act is effective when it becomes law, and expires December 31, 2009. Passage of a local COLA remains a long shot even though this raise does not involve any state funding and can be paid from undistributed gains in the LGERS. We will let you know when to contact you legislators on this issue.
A COLA FOR LOCAL GOVERNMENT RETIREES?