Massachusetts State Budget & Local Impact

The following are commentary regarding the recently passed state budget bill (MBPC offers a details comparison and analysis):

Senate bill would boost COLA base 33%
Friday, May 23 2008

The state budget bill passed by the Senate contains a costly provision that would increase the base for cost-of-living-adjustments (COLAs) for municipal retirees by 33 percent, from $12,000 to $16,000.

The provision would dramatically increase costs for cities and towns, without a new revenue stream to pay for it.

The MMA has noted three major problems with the COLA increase:

• The increase would add an estimated $2 billion or more to municipal unfunded pension liability – an increase that cities and towns have no ability to pay given the limits of Proposition 2½.

• Advocates for the increase have said that it will not affect the bottom line for communities if they simply extend their funding schedule by three years, but doing so would only multiply the cost. The Pioneer Institute estimates that extending the state’s schedule by three years would multiply the state’s cost from $2.8 billion to $8 billion.

• The acceptance language is flawed. It does not include the municipal executive in the decision to accept for the 85 cities and towns that have their own pension systems. And it does not include the municipal legislative or executive authority for the 266 communities in county and regional retirement systems.

The MMA will continue to voice its strong opposition to the COLA proposal with the House-Senate budget conference committee, calling instead for an independent comprehensive study of the entire pension system.

By MMA Legislative Director David Baier MMA

.

The battle to curb public pensions

.

IT'S ONE STEP forward, two steps back in the battle to bring pensions and other public employee retirement benefits under control in Massachusetts.

.
Beginning in January, MBTA retirees under 65 will contribute 15 percent toward the cost of their health insurance. Most T employees can retire with generous benefits after 23 years. Until now, those benefits included free healthcare for life. Not a bad deal, especially when you can retire in your 40s. TheBostonGlobe

.

Budget Monitor: The FY 2009 Senate Ways and Means Budget

.

The budget proposed by the Senate Committee on Ways and Means is closer to being structurally balanced than were the proposals by the Governor and the House. The Senate Ways and Means proposal would spend less than the Governor’s proposal and more than $150.0 million less than the final House budget.

.

This Budget Monitor examines the SWM budget by program area and describes how the spending levels compare to those proposed by the House and the Governor and to historic and current spending levels. It also reviews the tax proposals whose revenue is incorporated in the Senate budget. MBPC