North Carolina Legislature Should Keep Promise to Retirees

Alice L. Borders

During the half-century of my organization defending the interests of retired North Carolina government employees, we have had days when we were proud of our legislature.

We have also had times when they disappointed us and made us fight harder to achieve a fair and just result for those who helped make this state what it is today. There have been very few times that we have felt both disappointed and ashamed.

This is, unfortunately, one of those times.

After:Senate budget heads for veto

After:NC has played a historic role in securing the voting rights of young Americans; the inheritance must continue

The Senate budget was released and, once again, our legislators inexcusably failed in their responsibilities to retired public servants.

Since 2008, our public sector retirees have not had a significant increase in their pension checks. Their pensions have lost at least 20% of their purchasing power due to inflation. These workers served as highway patrol officers, public safety officers, health service providers, teachers, office workers, and grounds and maintenance workers. Many worked in conditions where wages would not be acceptable today.

Over their years of work, they provided the foundation for our state, which is now considered one of the most vibrant and best places to live in the United States. Compared to working in the private sector, their pay was modest, but they believed they had the security of a fair pension plan in their future.

When news broke last month that the state unexpectedly had a $ 6 billion surplus, we were confident that the legislature’s sense of fairness and justice would prevail and our retirees would benefit from the cost of living adjustment (COLA) which was well overdue.

Sometimes people ask what is meant by a COLA and why it exists. Government pensions are determined by a formula, based primarily on salary and years of service. A retiree knows in advance how many dollars his monthly check will contain.

It wants to be fair and predictable, but there is a problem. The amount paid does not increase, but the prices do. During the first years of inflation, the reduction in purchasing power might be manageable as the retiree lives more and more frugally.

Take the example of a woman who began her retirement in 2008 at age 65 with a pension of $ 1,000 per month. This year, she is 78 years old and her purchasing power, compared to 13 years ago, is only $ 800. She may need increased health care and prescription drugs. These prices and co-payers increase steadily, as do the prices of food, utilities, services, etc. But its purchasing power continues to decline.

This is where COLAs come in.

The loss of purchasing power of a retiree can be mitigated by the granting of a COLA by the General Assembly, so that his monthly check approaches the purchasing power initially promised. In some states, a COLA is linked to increases in the Consumer Price Index, the measure of the average price of a defined set of goods that the public tends to buy. Retirees in these states know that their purchasing power in retirement will remain constant regardless of inflation.

Until 2008, North Carolina offered regular COLAs to retired public servants. COLAs were to resume as needed after our financial crisis and the Great Recession had passed. But this recovery did not take place.

Inflation is rapidly increasing the cost of food, fuel and medicine.

The elderly were the most vulnerable demographic group during the COVID-19 pandemic. Their contact with family, church friends, neighbors and others has been cut off. Many remain in particularly difficult and lonely circumstances.

The Senate is proposing $ 13.9 billion in tax cuts. Tax cuts help ordinary workers and often stimulate the economy. But they do little to help those who are no longer in the workforce.

How can the legislator enact such huge tax cuts by saying that there is no money to help our retirees? Not providing a COLA that our retirees desperately need is breaking faith with those who have served the state and whose needs have become impossible to ignore.

We are better than that. Our history shows us that we have kept certain values ​​close – keeping our promises, fulfilling our obligations, demonstrating both financial responsibility and compassion. The budget of the General Assembly must demonstrate these values. Inflation and stagnant pension checks are drowning our state retirees.

Alice L. Bordsen is a retired member of the North Carolina House of Representatives, where she represented District 63 (Alamance County). She is a member of the board of directors of the North Carolina Retired Governmental Employees Association.

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