Of all the issues likely to come up during the 2020 budget session, a solution for retirees on the state’s pension system — who have not seen a cost-of-living increase to their benefits in more than a decade — is sure to attract ample attention from state lawmakers.
Since cost-of-living adjustments for Wyoming’s pensioners were eliminated in the wake of the Great Recession, retired state employees have seen slight pay increases while weathering increases in their state health insurance premiums. And those premiums could increase further as the Joint Appropriations Committee weighs raising them in order to keep up with costs that have consistently outpaced inflation rates in recent years.
“There are legislators looking seriously at changing deductibles and changing benefits,” Gov. Mark Gordon told Wyoming AARP members in a telephone town hall meeting Tuesday night. “It was a little bit of a surprise to see that we had the challenge we did. We really tried to mitigate what the raise was going to be and do it over several years so it wasn’t such a big shock. It is still a shock. I don’t think we are unique in that respect.”
For the state’s retirees, however, those costs can add up. Paired with an average inflation rate of 1.5 percent annually over the past 12 years, the retirees have seen the buying power of their pensions diminish substantially, their fixed incomes eaten up by everything from rising medical expenses to higher grocery bills.
“These retirees have not had any pay increase, on top of their health insurance going up,” Betty Jo Beardsley, executive director of the Wyoming Public Employees Association, said Wednesday. “That means they have less funds to spend in their communities.”
It’s a subject that the Wyoming Healthy Retirement Coalition — which the association is a member of — is prepared to take on in earnest during the 2020 session next month.
On Monday, the organization — which formed nearly a decade ago after efforts to privatize the state’s retirement system — will be holding a town hall in Cheyenne to promote the re-introduction of a failed bill from 2019 sponsored by House Speaker Steve Harshman, R-Casper. If passed, that legislation would have offered the state’s retirees a lump sum increase to their pensions in an effort to offset some of these built-in costs.
It’s a proposal that proponents believe could gain some traction with legislators in the House — who narrowly defeated the measure last year — while having little impact on the state budget. According to a Legislative Service Office fiscal note on last year’s version of the legislation, a cost-of-living increase to the state’s existing pension would cost the state $5.5 million annually.
In a state where roughly one quarter of the workforce is public employees, according to the Bureau of Labor Statistics, any increase is bound to be popular and far-reaching. Facing down bleak budgetary prospects and a Legislature more favorable to cuts than increases under those conditions, however, an increase in expenditures to the state pension system becomes a big ask.
Special interest groups like the AARP, however, feel that ask is a worthy one.
“A (cost-of-living adjustment) is certainly a concept we support,” Tom Lacock, the associate state director for communications and state advocacy at AARP Wyoming, wrote in an email. “It has been 12 years now since there has been a (cost-of-living adjustment), and while we understand the condition of the state’s finances, inflation and rising costs of health insurance for state retirees mean the pension funds our retirees worked so hard to earn in their working life just don’t go as far as they used to.”
“During our teletown hall (Tuesday night) we heard from a man who saw the health insurance costs through the state go up $3,000 this year for he and his wife, who both retired after careers with the state,” he added. “That is real impact on those who can least afford it.”