Hawkbells Article – May 3, 2019
It was a mixed session for school retirees. Some important victories were achieved, but there were disappointments as well. The Medicare Eligible Healthcare Benefit was restored to its pre-recession peak of $183 per month. Additionally, Plan 2 and Plan 3 retirees who retire before the age of 65 have the ability to work part time in schools without jeopardizing their pension check. WSSRA also joined in an effort with AARP Washington and King County Assessor John Wilson to help freeze your property taxes. But frustration was a common theme throughout the session too. For retirees, the major irritation came from the exclusion of the SCPP approved Plan 1 COLA from the final budget proposal.
Legislators finished this session in the nick of time with several last-minute deals. The State constitution required legislators to finish the Regular Session at 11:59 p.m. on Sunday, April 28th. They finished at 11:58 p.m. For the state budget written by Senator Rolfes and Representative Ormsby to work, both chambers had to agree on $2 billion in new taxes. Those votes happened late at night on the final weekend. A final compromise was reached on a school levies was also reached at the last minute. In order to get Republicans to drop numerous amendments that would have eaten up precious time, Democratic leaders agreed to pass some Republican priority legislation that sailed through the process from committee to final passage in five minutes at 11:50 p.m. It was an eventful final evening!
WSSRA’s biggest disappointment was the exclusion of the Plan 1 COLA. The House budget proposal included both the COLA and the medical restoration. The Senate included neither. House members are keen on blaming the Senate. Senate members say there was not enough revenue to cover a COLA. The cost for the COLA was $38 million in a $52 billion-dollar budget that included billions in new tax revenue. The financial argument does not hold water. Please continue to press your legislators about this over the interim.
The Medicare Eligible Healthcare benefit was lowered from $183 per month to $150 per month in 2011. WSSRA is happy to report the restoration of this benefit. It will help to keep insurance prices flat next year.
Import improvements for Plan 2 & 3 retirees were also passed this year. In 2008 the state lowered the retirement age for Plan 2 & 3; however, that change came with one important caveat. Individuals who accepted the improved retirement benefits were banned from working in any state or local (DRS covered) employer until the age of 65. If signed by the Governor, our legislation will allow those retirees to work part time in TRS / SERS covered school positions. It only excludes administrative positions.
Current law forces a strange predicament on some new school employees. New recruits are given 90 days to pick a pension plan. If they do not choose, they are defaulted into the hybrid Plan 3 at a 5% contribution rate for the duration of their employment in that district. WSSRA believes those rules are silly and was proud to sponsor SB 5360 to change the default plan to Plan 2, the traditional pension plan. That drama is now over and starting in the year 2020, new employees who default will default into Plan 2.
There is excellent news to report in the world of senior citizen tax relief. The passage of SB 5160 will increase income thresholds for property tax freezes and exemptions. We believe that a large number of school retirees will now qualify for a freeze on future property tax increases. The exemption will be based on income and county of residence, but any Clark County retiree household with a household income of under $48,500 will likely qualify for the freeze. It will be an important project for the WSSRA state office and local units to help retirees apply for their new property tax assistance.
The mission for the next few months in clear. There must be continued advocacy on the Plan 1 COLA for the 2020 legislative session. The current COLA bills in the system are still alive for next year. The other imperative is to help retirees sign up for their property tax freeze. That benefit will only be offered to qualified applicants. It is on us to help WSSRA members know that their property taxes needn’t increase every year. This will take some work, but will be worth the effort.
Peter Diedrick, Legislative Director
Washington State School Retirees’ Association