Romney Slights Retirees - Again

MARCH 2006 - No Pension COLA In His Annual Budget - It's hard to believe, but Governor Mitt Romney, in submitting his FY 07 state budget (effective July 1, 2006) to the Legislature, failed to include a 3% pension COLA for state and teacher retirees.

Once again, it will be up to the Legislature to correct Romney's "mistake" as they have in the past. In Romney's first year in office he didn't include a pension COLA in his budget, but the House and Senate took care of things. In his second year, he filed a COLA amendment after neglecting to do so in his budget. Last year he or his staff woke up and included a COLA as a budget item.

We say "mistake" because it is almost inconceivable that a man in his last year in office, preparing to run for president, would knowingly dis the state and teacher retirees' COLA. What a legacy to leave his partner, Lt. Governor Healey who wants to succeed him as governor!

"Maybe we're being generous in calling Romney's COLA failure a mistake," says Association President Ralph White. "Perhaps he doesn't believe that retirees deserve a COLA. But it really doesn't matter. Members can be assured that the Legislature, Democrats and Republicans alike, as they have in the past, will include a 3% COLA when the budget becomes final."

Locally, we don't anticipate any problems. City, town, county, district and authority retirement boards have already begun the process of voting for 3% COLAs for their retirees and survivors. Members will recall that our Association's legislation in 1997 (Ch. 17) gave this authority to the boards. They don't need the approval of their governing authority.

"This was landmark legislation," said White. "It was very difficult to get passed, but well worth the effort.

"The COLA is now in the hands of people who know and understand the needs of the retirees and survivors in their systems. Historically, it's been a rare occasion that a board failed to vote for three percent, but none in recent years."

And Targets State/Local Health Insurance For Increases

Adding insult to injury, not only did the governor fail to include the COLA in his budget, but he also included several sections that would cut retiree benefits and increase their premium costs.

Like a broken record, Romney repeated last year's attempt to increase the insurance contribution under the state Group Insurance Commission (GIC) plans for retirees and survivors, who are under age 65 and not subject to automatic enrollment in Medicare, to a 75%-25% split. Currently, retirees pay 10% or 15% depending upon their date of retirement.

In addition, all active and future state employees would be placed under a 75%-25% contribution split. This move would dramatically increase costs placed on those retirees and employees impacted from 67% to 150%.

At the local level, the governor repeated his attempt to eliminate collective bargaining for healthcare, create municipal GICs, and allow local legislative bodies to set contribution rates, above 50% for both employees and retirees. Each provision would prove disastrous for retirees and employees alike.

Under the Romney proposal, municipal government could unilaterally decide plan design, copayments, deductibles, and contribution levels. Retirees would be given little input and almost no control over their crucial insurance plans.

"The final Romney/Healey budget appears to be nothing more than another slap in the face to retirees and survivors. They are advocating for increased insurance costs, while not even helping with a modest COLA," said Association Legislative Liaison Shawn Duhamel. "Once again, the focus seems to be on simply shifting around the cost and letting it land on our members' backs. The governor has not proposed a single thing that gets to the root of the problem, which is the high cost of healthcare.

"Quick fixes and scapegoats may make for convenient campaign slogans, but it does nothing for people living under very modest means. We will be working closely with the Legislature and asking that they take no action on these initiatives as filed by the governor."

House and Senate Ways and Means Committees are reviewing the budget. Updates will be reported on our hotline and online.