The Boston Globe reports:
Massachusetts lawmakers are proposing bigger pensions for state and municipal employees that could cost $6 billion or more, according to some estimates, triggering a chorus of complaints from fiscal watchdogs and local leaders who say the money is not there to pay for it.
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The union-friendly, election-year maneuvers by the House and Senate would increase the annual cost-of-living adjustments that retirees receive as part of their pensions.
The individual numbers are seemingly small, a boost of about $120 a year more for every retiree, which advocates say is well-deserved. But multiplied by over 100,000 former teachers and state workers in the state's pension system as proposed by the House and by 86,000 municipal retirees as envisioned in a Senate amendment, it would add up fast, say critics.
"It's a tremendous gesture, but the money doesn't exist," said Mayor Scott W. Lang of New Bedford, who says he would have to lay off six current employees to make it work for the city's 1,721 retirees. "I have absolutely no qualms whatsoever of bumping that to meet the inflationary needs, but there's no funding. Without the funding it's illusory."
and this:
Since 2000, the Legislature has granted a 3 percent increase each year, calculated on that $12,000 base. The result has been a flat $360 boost every year for every retiree with a pension of more than $12,000.
The budget amendments, which cleared the House and Senate this month by unanimous votes, would raise the base amount to $16,000. With the same 3 percent bump on that new base amount, the flat fee for every retiree would rise to $480, a 33 percent increase.
Because the average pension for state retirees is about $22,000, the shift would mean almost every employee gets the maximum increase. To pay for the pension boosts, state lawmakers are using an approach that State Treasurer Timothy P. Cahill called risky for state credit ratings.
The most powerful special interest group in Massachusetts.
