Pension boost OK'd for Mass.state workers

The Boston Globe reports:

Massachusetts lawmakers, moving quickly and without debate in the final hours of the legislative session, approved a pension increase for state workers that could cost more than $3 billion over the next 20 years, sparking criticism from fiscal watchdogs who say the state cannot afford such a costly benefit.

The bill, which was strongly backed by unions in the midst of an election year, would increase the annual cost-of-living adjustments by about $120 per year for retired teachers and state employees, helping them afford the spiraling cost of fuel and food, supporters say. But because the number of eligible retirees is so vast - about 100,000 would receive the benefit - the cost could reach $2.7 billion to $3.5 billion by 2026, according to the Massachusetts Taxpayers Foundation, a business-backed fiscal watchdog group.

"There is no money to pay for this enhanced benefit, regardless of the merits," Michael J. Widmer, the foundation's president, said yesterday. "It's another example of the administration and the Legislature passing a benefit and simply passing the buck to a future taxpayer. . . . it's the height of irresponsibility."

The initiative comes at a time when state leaders are struggling to find a way to fix dilapidated bridges, pay for the rising costs of the state's healthcare law, and provide property tax relief to cities and towns that have been forced to layoff workers and slash budgets. A previous version of the bill would have been even costlier, requiring municipalities to offer the same benefit to their retirees. Legislators dropped that portion after an outcry from local leaders.

The boost for state retirees also comes at a time when cost-of-living increases are almost unheard of for pensions in the private sector - and private pensions themselves are becoming, in some ways, a thing of the past.

Governor Deval Patrick has signaled his support and said in a statement released yesterday: "At a time when fuel and energy costs are on the rise, even a limited increase will help retirees living on a fixed income."