Early retirement bill sails through House
An early retirement incentive plan proposed by Gov. Charlie Baker passed unanimously in the House Wednesday afternoon, in an effort to save $173 million in next year's state budget by trimming payroll.
An estimated 4,500 state workers in the executive branch who are 55 or older or have 20 years of service would need to be enticed to participate in the pension sweetening program for the state to meet it's savings goals.
Rep. John Rogers (D-Norwood) attempted to make all "Group 1" state employees eligible for early retirement, but withdrew his amendment before lawmakers voted. Group 1 is made up of general employees, including clerical, administrative and technical workers, laborers, mechanics and all others not otherwise classified, according to the Massachusetts Public Employees Retirement Guide.
Rogers said he believes lawmakers were making a mistake by not allowing a larger number of people to participate. Under Rogers' amendment, elected officials and anyone serving as a chief justice or associate justice of the state Supreme Judicial Court, Appeals Court, or Trial Court would not have been eligible.
Haverhill Rep. Brian Dempsey, who chairs the House Ways and Means Committee, said if more state workers were allowed to participate it would "water down the savings."
The retirement plan counts on hiring back fewer workers to achieve payroll savings, capping the "backfill" at 20 percent of payroll savings, Dempsey said.
Rep. James Murphy, a Weymouth Democrat who chairs the Public Service Committee, said one of the most important provisions of the bill is the restriction on rehiring.
House lawmakers also unanimously authorized $200 million in borrowing (H 3187) to fund local road and bridge repairs as part of the Chapter 90 program.
Rep. Michael Finn (D-West Springfield), who is the House vice chairman on the Transportation Committee, said the Legislature enacted the Chapter 90 program exactly 43 years and two days ago. Lawmakers unanimously passed this year's version of the road repair bill without any debate Wednesday.
"It also shows a continued commitment by this Legislature to provide safe roadways," Finn said.
Both bills now head to the Senate. The Joint Committee on Public Service plans to hold a public hearing on Monday on the early retirement program, and Senate President Stanley Rosenberg said this week he hopes the committee will pass along its recommendations quickly to the Senate Ways and Means Committee. Rogers said he hoped to continue the conversation about expanding the retirement program to additional employees during the hearing next week.
Trial Court Administrator Harry Spence told lawmakers Wednesday during a budget hearing in Worcester if the early retirement plan were to be expanded to the courts, an analysis showed approximately 400 court employees would opt to retire, leaving the court system unable to operate after losing that many people.
The House version of the bill differed slightly from Baker's proposal, pushing back the deadline for employees to retire by one month from June 30 to July 31, foregoing some savings. Dempsey said the governor's timeline was a "bit aggressive."
Dempsey said some lawmakers expressed concerns about how the plan would affect the state's bond rating. The House version of the bill adds $49 million to the pension fund to pay for the program, according to Dempsey. The last time the state offered an early retirement program in 2002, no money was added to the pension fund, he said.
"The bond agencies are looking at how are we handling our pension obligations? We are doing very, very well," Dempsey said.
The House adoped one amendment filed by Rep. Jonathan Hecht, a Watertown Democrat, expanding the scope of a report that must be filed by the administration to include details of how work duties of positions that are not refilled are being performed.
Also at the Worcester budget hearing, Ethics Commission Executive Director Karen Nober said she could save about $34,000 if the early-retirement bill was extended to the independent agency.
"I have one employee who would take advantage of this program," Nober told Senate budget-writers Wednesday. She said, "We would be able to backfill that position at a substantial savings to the commission."
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