3rd Interim Budget Funds State Through November

3rd Interim Budget Funds State Through November

COLA & Retiree Work Extension In-Works

October 27, 2020: Working in coordination, Governor Charlie Baker and the state legislature have passed a 3rd interim FY21 State Budget that funds the Commonwealth’s operations through November. The first interim budget was passed in late June, covering operations for the month of July. A second budget was then passed to continue operations through October.

As we have previously reported, the reason for the budget delay is the ongoing COVID-19 pandemic and resulting economic turmoil now gripping much of the world. Parts of the Massachusetts economy, such as tourism and hospitality businesses, have been hit extremely hard by the loss of economic activity. This has directly impacted state and local finances, creating great uncertainty regarding expected tax revenues for FY21. 

State officials chose to delay the final adoption of a full budget until such time as more information is available on the true financial impact due to COVID-19. Unfortunately, the budget delay has resulted in the unintended consequence of the FY21 COLA for State and Teacher retirees also being delayed. While funding for the COLA comes from the pension system itself and is not reliant on a direct budget appropriation, the legal authorization for the COLA payment to be made to retirees is contained within the outside sections of the budget.

Last week, Governor Charlie Baker filed a revised FY21 budget proposal that contains the authorization of a 3% State/Teacher COLA on a $13,000 base retroactive to July 1. This budget is likely to be approved by the House and Senate by mid-November, which would mean that the retroactive COLA payment could be included in the November pension check. 

In addition, the Mass Retirees legislative team is working with the Baker Administration and legislature to extend the waiver for retirees to return to full-time public sector work during the pandemic. All across the Commonwealth, retirees have returned to work to assist in carrying out key government functions in areas of public health, unemployment and other essential jobs. The current waiver expires at the end of 2020, but is hoped to be extended through the duration of the ongoing crisis.

“When the waiver was created back in March, no one anticipated that we’d still be in the grip of the pandemic at the end of 2020, but here we are. We’ve heard from many members who have returned to public service to help out during the pandemic. This includes officials with local boards of health, as well as administrative workers within the state’s unemployment office. All of these retirees are able to help during this crisis by sharing their experience and expertise,” explains Mass Retirees Legislative Liaison Nancy McGovern. “What we are working to do is simply extend the waiver through the full duration of the Governor’s declaration of emergency. This will ensure that the state and local governments continue to get the help they need, while retirees are not placed in a position where they have violated the return to work law. Our hope is to have this issue resolved before the end of the year.”