COLA progress report

On April 5, the legislature's Public Service Committee heard testimony on thirteen bills relating to the COLA for retired  public employees.  After deliberating for the past month, the committee, on May 9, voted to raise the base on which a COLA is calculated from $12,000 to $16,000 beginning July 1, 2007, and to index future base increases according to a schedule of increases to which Social Security recipients are entitled.

Under current law, a public employee is eligible for a COLA increase of not more than three percent on the first $12,000 of one's retirement allowance or a maximum of $360 annually.  State Sen. Richard T. Moore (D-Uxbridge) and State Rep. Frank M. Hynes (D-Marshfield) filed legislation for MTA (SB1586) that would increase the base to which a three percent COLA would apply from $12,000 to the amount of the current Social Security maximum.

Provisions

The Public Service Committee has redrafted MTA's bill and contains the following provisions:

  • Increases the base to which a COLA is applied from $12,000 to $16,000 beginning  July 1, 2007.
  • Automatically ties all future base increases on which COLAs are calculated to the federal government's Consumer Price Index (CPI).
  • Sets the annual COLA increase at the three percent or the CPI, whichever is higher.
  • All future COLAs would be automatic according to the new indexing formula and not subject to annual votes by the state legislature as is currently the case.
  • Beginning July 1, 2008, the base on which a COLA is calculated would be increased from the current $12,000 or 46 percent of the current Social Security maximum of approximately $26,000 to 65 percent of the estimated Social Security maximum of $26,780, or approximately $17,400.
  • For subsequent years, the COLA base would be increased in 2012 to 75 percent of the Social Security maximum at that time, 85 percent in 2016, 95 percent in 2020 and 100 percent in 2024.  (It is important to realize the Social Security maximum to which the COLA is tied increases each year according to the CPI.)
  • Provisions of this bill, once enacted, are applicable to all members of the Teachers and State Employees Retirement Systems.  Municipal, county, and other systems require local approval of the bill's provisions by the appropriate retirement board and local legislative body.

Tentative Time Table

SB1586 (as redrafted) will be sent to the Senate Clerk for processing and then referred to the Senate Committee on Ways and Means for its analysis, consideration and recommendation before it can go to the Senate for debate.

At this juncture, it is not known what Senate Ways and Means will do.  What is known is that the bill will be expensive and state revenues are very scarce.  Consequently, the committee will be requesting updated figures on what the redrafted bill will cost.  Committee action, however, is not expected for some time as the committee is currently working exclusively on the FY2008 State Budget, which will not be completed until June 30, 2007.

What's Next?

Since the redrafted bill is in the Senate, lobbying efforts need to be concentrated there and not the House of Representatives. Because of the additional research needed and the current Senate focus on the state budget, COLA advocates are more likely to influence their senators this summer and continuing into the fall, as it is anticipated passage will take a great deal of time. Consequently, it is requested that your calls and e-mails begin in late June and that you continue to ask your senators every eight weeks or so for an update on when Senate Ways and Means will be reporting the bill. This approach will help keep the pressure on the Senate. Additional grassroots lobbying recommendations will be forthcoming from MTA.

Kudos

Deserving special recognition and appreciation for persuading the Public Service Committee to report a meaningful COLA bill are:

  • Retired MTA members who sent more than 3,000 e-mails to their legislators.
  • Participants in MTA's COLA Lobby Day on Beacon Hill and those who presented compelling testimony at the COLA hearing on April 5, 2007, including Paul Toner, MTA vice president, former MTA presidents Kathleen Roberts and Mary Gilmore and Marguerite Gonsalves, past president of the Malden Education Association.
  • The co-chairs of the Public Service Committee, Rep. Jay R. Kaufman (D-Lexington) and Sen. Benjamin B. Downing (D-Pittsfield) as well as the bill's chief co-sponsors, Sen. Moore  and Rep. Hynes.