Pensioners appeal to Delaware budget-writing lawmakers for raise

DOVER — Dozens of retirees flocked to Legislative Hall Tuesday to urge lawmakers to raise benefits for pensioners.

All sorts of special interest groups are expected to appear before the legislature’s budget-writing body over the next month as different populations try to get their hands on state funding. Gov. John Carney’s budget proposal, unveiled last week, totals $4.63 billion in recurring operating expenses, up about $180 million from the current fiscal year.

Tuesday marked the first day of budget hearings, although the spending plan itself won’t be finished until June. These meetings are a chance for the 12 members of the Joint Finance Committee to hear from agency heads and members of the public, allowing them to formulate a vision for potential changes when the committee convenes again in May to make some alterations.

The first day featured a financial overview and presentations by the Office of Management and Budget and Department of Human Resources. While those two agencies may not seem especially controversial and are probably little-known to most citizens of the state, they handle issues around key subjects like pay, health care and employee relations.

Although state employees received pay bumps of either $1,000 or 2 percent in each of the past two years and the governor’s recommendations include another 2 percent raise, pensioners have seen comparatively little. Retirees received a $400 bonus in 2018, the same year active workers got not just the raise but also a $500 bonus.

“All of us in the retired education department are being eaten alive with the cost of living,” Delaware Retired School Personnel Association President Ted George told JFC.

The last permanent increase came five years ago, he said, causing an “erosion” of benefits for more than 13,000 retired educators. Since retiring almost 19 years ago, Mr. George said, his pension’s purchasing power has gone down by 28 percent.

Inflation and higher medical costs have hit many retired Delawareans hard, speakers said. According to Mr. George, there are about 1,200 pensioners below the poverty line, an increase of 100 in just a few years.

The Delaware Retired School Personnel Association is seeking a mechanism for providing pension increases every other year for state troopers, judges and most executive branch workers. The group hopes to see 3 percent of gross payroll, estimated to equal about $61 million, placed in the fund for retirees.

That funding, the association estimated, would lead to increases of 3.2 percent for individuals who retired before 2000 and 1.6 percent for others.

Backers described the proposal as fair to both pensioners and the state, offering some certainty to both sides, but that’s just one of the many directions the committee is being pulled in.

“It’s tough,” JFC co-chair Sen. Harris McDowell, D-Wilmington, said after the meeting. “There’s a couple different philosophies at work. It’s tough. But there are a lot of them and covering them in a meaningful way is a lot of money.

“So, we’re trying to see if there’s a way we can go and be meaningful. I don’t want to do what we’ve done before and say, OK, we’ve got $500” for a one-time payment.

According to the Delaware Retired School Personnel Association, almost 27,700 retired individuals were in the general state employee pension plan, with an average payout of about $21,800, as of two years ago. The makeup of the judicial and state police pension plans is much more limited, for obvious reasons, and the average pension amount is several times higher.

Joseph Malloy, chairman of the Pension Advisory Council, said pensioners have seen just two permanent increases since 2007 and pointed to language included in last year’s grant-in-aid bill, which provides funds for many nonprofits.

“It is the intent of the General Assembly to include a post retirement increase for beneficiaries of the State Employee’s Pension Plan, the Judicial Pension Plan, and the New State Police Pension Plan effective July 1, 2020 (Fiscal Year 2021 Budget),” states a portion of that legislation.

“Options for consideration shall include, but not be limited to, a post retirement increase that addresses the erosion of pension benefits, due to inflation and other factors, for the longest serving retirees. The further intent is to establish post retirement increase policy that is financially sustainable in future fiscal years.”

Mr. Malloy is seeking a 3 percent increase.

Retirees sounded a similar note last year, although they were unsuccessful in getting more money in their monthly sum or in raising the $7,000 death benefit.

A bipartisan bill that would have mandated the payout to retirees keep up with increases in the national consumer price index average annually never made it out of the Senate Finance Committee last year. Seven of the 12 members of JFC are signed onto that bill as sponsors.