By Joshua Miller
Globe Staff March 23, 2015
In a boost for a key part of Governor Charlie Baker’s budget plan, Speaker Robert A. DeLeo Monday backed a pension-sweetening early retirement program that Baker proposed to help close a gnawing state budget gap.
DeLeo said the House of Representatives intends to vote as soon as this week on the plan, which works to entice thousands of state workers to retire early by offering them a chance to boost their pensions by crediting them with up to five additional years of age or work.
By Joshua Miller
Globe Staff March 23, 2015
In a boost for a key part of Governor Charlie Baker’s budget plan, Speaker Robert A. DeLeo Monday backed a pension-sweetening early retirement program that Baker proposed to help close a gnawing state budget gap.
DeLeo said the House of Representatives intends to vote as soon as this week on the plan, which works to entice thousands of state workers to retire early by offering them a chance to boost their pensions by crediting them with up to five additional years of age or work.
Standing next to Baker and Senate President Stanley C. Rosenberg at the State House, the speaker told reporters his chamber’s version would “mirror, pretty much” the scope of Baker’s proposal, part of an effort to bridge an administration-projected $1.8 billion budget shortfall in the new fiscal year, which begins in July.
Rosenberg indicated the Senate could move on a slower schedule, saying the Senate chairman of the public service committee would hold a March 30 hearing on the plan.
The Baker administration has forecast 4,500 people would take advantage of the early retirement offer saving the state $178 million in new fiscal year, after accounting for costs such as paying out vacation days and filling a fraction of the newly-vacant spots. In Baker’s plan, the cost of refilling those positions is capped to ensure a significant chunk of money is actually saved.
Timing of the bill’s movement matters.
“For the state to realize $178 million in net savings for [the new fiscal year], the legislation would have to be enacted in time for employees to retire by June 30,” said Dominick Ianno, a spokesman for Baker budget chief Kristen Lepore.
Rosenberg acknowledged the clock.
“The governor says if we’re going to do it, we need to do it soon, so we will not want to be obstructionist,” he said. “If we’re going to move ahead with it, we need to move.”
DeLeo had earlier expressed apprehension about anticipated savings not panning out with early retirement programs generally, but indicated on Monday any worries about Baker’s plan had been assuaged.
He said, in effect, the governor’s projected savings from the plan were legitimate and are needed “to make this budget balance.” He said the limit on refilling positions “makes it economically feasible and, I think, good for us to take up.”
The House Committee on Ways and Means is polling its members on its version of Baker’s proposal and asked them to say by Wednesday morning whether they back it.
Brian S. Dempsey, the committee chairman, said in a telephone interview that the draft House bill is very similar to Baker’s plan with only “modest changes.” Among them, moving the window for eligible employees to apply for retirement forward, to give the Legislature time to pass the bill. That would lead to a small reduction in projected savings, he said.
Dempsey underscored the importance of moving quickly: “We need to take action on it sooner rather than later,” he said.
The draft House bill, like the administration’s proposal, limits the retirement program to executive department workers who meet certain eligibility requirements. That department includes a wide swath of the state bureaucracy from the health and human services secretariat to the governor’s office itself.
Although Dempsey said there are certainly other parts of state government that would have an interest in being part of the early retirement program, he explained it was not fiscally prudent to expand it beyond the executive department because savings could not be assured.
This month, Lepore, Baker’s budget chief, warned of layoffs if the expected savings from the program do not materialize.
“We need to get to that number, one way or another,” she told the Globe. “If we’re not able to reach this number, I’m going to have to do layoffs.”
But Ianno, her spokesman, struck a less dire tone Monday.
“The secretary and governor are confident that the Legislature will pass the” early retirement program, he said. “If not, they will work with other members of the executive branch to make sure the Commonwealth arrives at a balanced budget for” the new fiscal year.