Summer Edition 2024 | Living Power Magazine
Summary and News
The North Carolina General Assembly operates on a biennial schedule. In odd-numbered years, they convene for the “long session,” which typically runs from January through midsummer. During this session, lawmakers address various legislative matters, including adopting a biennial budget. In contrast, in even-numbered years, the “short session” is conducted to modify the budget approved during the long session and discuss bills previously “crossed over” between
the House and Senate. Until a modified budget is approved, the previous funding plan provided in the biennium budget remains in effect. At the time of this publication, the General Assembly is still in its short session.
As a refresher, the 2023–2024 biennial budget included:
• 4% one-time supplement to State Retirees (distributed in October 2023)
• 4% increase for state employees (effective July 1, 2023) and a 3% increase on average for state employees
(effective July 1, 2024)
The Office of State Budget and Management and the General Assembly’s Fiscal Research Division submitted a revised Consensus budget in May, forecasting a $987 million surplus beyond planned revenue.
In the current short session, the Governor, House, and Senate have each submitted budgets. However, the House and Senate have not agreed on a final budget this session, debating whether to provide additional funding for the state’s retirees to combat inflation.
Key details for you to know are:
• The Governor’s budget included a 3% one-time supplement for state retirees. (This would deliver an average of $640 to each retiree at a cost of approximately $170 million).
• The House budget was approved with a 2% one-time supplement for State Retirees (this would deliver an average of $426 to each retiree at a cost of approximately $114 million).
• The Senate’s budget was approved without any supplement or cost-of-living adjustments. It should be noted that several bills were filed leading up to the budget submissions, including bills with cost-of-living adjustments (COLA) for retirees (HB 930, HB 934, SB 805). HB 930 included COLA for local government retirees, but none of these bills made it beyond the Appropriations or Rules Committees. In the Local Government Retirement System (LGERS), the General Statutes provide limited authority to the Trustees to award COLA or pension supplements, and their decisions can be overruled by the General Assembly enacting legislation to provide for a larger or smaller increase for LGERS retirees.
WHAT CAN YOU DO TO MAKE A DIFFERENCE?
Since the supermajority has power to override any budget veto by the Governor, your communication with your legislators is imperative now. If you have responded to NCRGEA’s recent call to action email campaign, we thank you. If you have not already, you can still make a difference by completing the call-to-action email or by calling and/or writing your Senator and letting them know that you value their support of the House’s proposed budget, which includes the 2% pension supplement to state retirees. You can easily find out who your Senator is by going to NCRGEA.com/advocacy/findmylegislator.
Note: NCRGEA has and always will advocate for true cost-of-living adjustments. Pension supplements are appreciated but fall short of stemming the longer-term impact of inflation that state and local employees have experienced in the past decade. NCRGEA looks forward to bringing this position forward again with the General Assembly and Trustees in the coming months.
Other News
On the State Health Plan front, in 2025, the Humana Medicare Advantage coverage premium will increase from $0 to $33 in 2025 for those who are not fully vested and their dependents. Those who are fully vested will not be impacted by this increase. Rising healthcare costs and underfunding of the State Health Plan are cited as factors in this increase. At the most recent State Health Plan Trustees meeting, Treasurer Dale Folwell shared that the 2023–2025 budget contained $240 million less than requested to operate the State Health Plan.
NCRGEA has been informed that the next court date for Lake v. State Health Plan for Teachers and State Employees, has been postponed from October 2024 until March 2025 due to a judicial calendar conflict. For more information on the case status and details, we advise you to go to LakeClassCase.com. This site is hosted by the law firm representing the plaintiffs in this class action lawsuit. NCRGEA looks forward to seeing this case brought to closure and the government retirees impacted by this case justly compensated for their lost benefits.