As budget negotiations ramp up, dozens of retired state workers came to the legislature Wednesday to demand a cost-of-living increase – something the Senate left out of its budget.
The House budget includes a 1.6 percent increase in the money state retirees receive in their pension checks. But Senate leaders say that proposal would be too costly and could harm the financial stability of the state’s pension system.
Current state employees fare better in the two budget proposals, with merit bonuses and raises in the Senate budget and a 2 percent across-the-board raise in the House budget.
“It seems as those doors close once you become retired,” said Laverne Reed, a retired educator from Charlotte.
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“We so much desperately need that COLA,” Reed said, referring to a cost-of-living-adjustment. “Insurance costs are just soaring. When you are my age, you don’t get a chance to go to the regular doctor. You have to go to all these specialists.”
Sen. Joyce Waddell, a Mecklenburg County Democrat, said legislators should do more than the House budget and offer a 2 percent increase for retirees.
Waddell and other legislators at Wednesday’s news conference said retirees haven’t received an increase since 2009. But a document provided at the news conference – and confirmed by the office of Senate leader Phil Berger – showed that retirees received a 1 percent cost-of-living increase in 2012 and again in 2014.
“The Senate budget includes nothing, and that’s why we are here,” Waddell said. “Buying power for retirees has decreased. Food has gone up, clothing has gone up, and many are telling me that they have to eat cat food for their meals. We cannot afford for that to happen.”
Senate Republicans point to data indicating that the House’s 1.6 percent raise for retirees would add $667 million to the pension fund’s liability over 12 years. They argue that the increase could destabilize the pension system and lead to a situation like what’s happened in Detroit, where retirees aren’t fully paid.
“Look at Detroit and what’s happened to their retirement plan,” Senate budget writer Harry Brown said recently. “I don’t think any of us want to put our retirees in that situation.”
But Rep. Mickey Michaux, a Durham Democrat and former House budget writer, disagrees. “The majority of it comes from the earnings on the (pension) trust fund,” he said. “That's why we can afford it and not hurt anything in the general fund. We’ve got the third-best retirement fund anywhere in the country.”
Several of the retirees at the legislature Wednesday said they have to work part-time jobs because their pensions don’t provide enough money for their living expenses.
“We have people making $1,000 or less (monthly) as a pension, and they are really struggling,” said Linda Gunter of the Wake County Retired School Personnel. “I hope you'll stand firm. We should be a priority, not a liability.”
House and Senate leaders are currently negotiating a final budget in private meetings. They’ve said they hope to release and vote on a budget before the July 4 holiday weekend.