Sununu breaks from party, supports state retiree cost of living adjustment 

Monitor staff
Published: 5/20/2019 4:32:05 PM

A bill to increase cost-of-living benefits for state retirees is set to pass after Gov. Chris Sununu broke from his party and announced his support.

Flanked by firefighters last week, Sununu portrayed the proposal as an overdue effort. The last increase was in 2010.

“For nearly 10 years, our state’s retirees have been without an actual cost-of-living adjustment that directly goes toward the base payment of their benefits,” Sununu said, adding that the “time to do this is now.”

House Bill 616 would grant a 1.5% increase in the retirement allowance of state employees to anyone who retired before July 2014. That bump would be capped at $50,000 of income, meaning those making above that amount would receive an increase up to their first $50,000, totaling $750.

The increase would cost cities and towns and other local entities about $4.3 million across the board in fiscal year 2022 and $4.5 million in fiscal year 2023, according to an analysis by an actuary for the New Hampshire Retirement System, which relied on figures form 2017.

The state, meanwhile, would be on the hook for about $1 million in extra retirement contributions, the actuary estimated.

The proposed increase would not affect New Hampshire’s progress in paying off its nearly $5 billion unfunded liability. Still, Republican senators blasted the move as an undue burden on towns that could lead to tax increases.

“This legislation flies in the face of all the work that has been done to reform the state’s pension system,” said Sen. Jeb Bradley, a Wolfeboro Republican. Making up the difference would be a hardship to towns, he added.

“Our Democratic colleagues ran last year on lowering property taxes, but their vote today proves they actually will increase property taxes,” Bradley said.

Sen. Sharon Carson agreed. “I have sponsored responsible COLAs in the past ...” she said, using the acronym for “cost of living adjustment.” “However, this COLA is an irresponsible use of taxpayer funds and creates an extreme burden on local communities who will be forced to raise property taxes to pay for it.”

Supporters of the cost of living adjustment, including the State Employees Association, have countered that town and city retirement system contributions have been falling in recent years as the state makes progress on paying off the principle of its debt.

Attending last week’s event with the governor, Bill McQuillen, chairman of the New Hampshire Retirement Security Coalition, called the increase “much-needed” and “modest” and dismissed the cost concerns as disingenuous.

“Time and again, recent legislatures have used the rising employer costs of the pension system as the boogeyman against cost of living adjustments,” McQuillen said.

Sununu’s endorsement represents a rare break from his House and Senate colleagues, and gives the bill a likely chance of passage. After clearing the House last month and the Senate Executive Departments and Administration committee last week in a 3-2 vote, the bill is scheduled to be debated and vote on by the full Senate on Thursday.

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