The Honorable Michael Brady, Senate Chair
The Honorable Jerald Parisella, House Chair
Joint Committee on Public Service
State House, Boston

Dear Chair Brady, Chair Parisella, and Distinguished Members of the Committee,

The Massachusetts Municipal Association is writing to submit the following comments on a number of bills that are on today’s hearing agenda. We appreciate the Committee’s consideration of the local government position on these bills and the negative financial and administrative impact these measures would have on municipalities, if passed.

Public Safety Residency Requirements

The MMA opposes several bills that would change the rules related to residency requirements for municipal public safety employees:

H. 2275, An Act relative to residency, would set a 15-mile residency requirement for employees not subject to civil service under Chapter 31. The bill would also authorize cities and towns to increase the 15-mile residency limit through collective bargaining.

H. 2278, An Act relative to residency, would repeal the authority of a municipality to set residency requirements for public safety employees.

S. 1474, An Act relative to civil service resident preference, would require a city or town to consider an applicant as having resided in that community for one year immediately prior to the date of the examination, if the applicant so chooses and if they have obtained a high school diploma in that community or resided in the community when they received their high school diploma.

S. 1552, An Act relative to residency, would require any public safety employee appointed after August 1, 1978 to reside within 15 miles of the town in which they serve, and would authorize cities and towns to increase the 15-miles residency limit through collective bargaining.

Currently, section 58 of Chapter 31 of the General Laws permits cities and towns to request that residents be placed on an entry-level civil service eligible list for police and firefighters before non-residents. Under that statute, a person must reside in the same city or town within 9 months from the date of appointment, or in any other city or town in the Commonwealth that is within 10 miles of the city or town’s perimeter. Civil service communities may increase the 10-mile residency limit under a collective bargaining agreement. Public safety employees in communities not subject to civil service must reside within 15 miles of the city or town limits under Massachusetts General Laws Chapter 41, section 99A, subject to the provisions of local ordinances, bylaws or collective bargaining agreements.

These bills would change residency requirements, and would undermine local bylaws and ordinances, as well as undermine changes made in 2013 to laws governing residency requirements that significantly expanded the ability of municipal public safety employees to reside beyond the 10-mile limit and even live in other states. These bills would also erode local flexibility in determining the best policy regarding residency requirements for municipal public safety employees, which are decisions that should be made at the local level and not by the Commonwealth. The current framework provides the necessary flexibility for municipalities to deal with residency requirements in respective communities.

We ask the Committee to give H. 2275, H. 2278, S. 1474 and S. 1552 an unfavorable report.

Evaluations of Veterans Retired for Disability

The MMA opposes H. 2166, An Act relative to evaluations on a retired veteran’s disability. This bill would amend section 8 of Chapter 32 of the General Laws, by exempting veterans retired for disability from further evaluations after their first five years of retirement. Section 8 requires those currently retired for disability to undergo an evaluation to determine whether the member is able to perform the essential duties of the position from which they retired, or a similar job within the same department for which they are qualified. The evaluation also requires a determination as to whether a member’s return would be expedited by participation in a medical or vocational rehabilitation program. These evaluations occur once a year during the first two-year period after the date of retirement, then once every three years thereafter, or any time upon a member’s written request.

Requiring examinations and reevaluations of employees retired for disability allows employers to ensure that retired employees who are receiving public monies in the form of a higher-percentage disability pension are unable to perform the essential duties of the position from which they retired. This remains an important tool for manager’s assessing the impairments and determining the functional limitations of those employees retired for disability, and also allows managers to determine the future path for employees unlikely to return to work. It would be impossible to predict the individual circumstances of each case, and exempting veterans retired for disability from further evaluations after five years precludes employers from evaluating each case independently based on the particular circumstances. This bill would reverse an important reform implemented by the Legislature to curb abuse of the system and to ensure that taxpayer dollars are appropriately spent.

We ask the Committee to give H. 2166 an unfavorable report.

Indemnification of Public Safety Employees and Retirees, and Extension of Heart, Lung and Cancer Presumption

The MMA opposes H. 4104, An Act relative to the Commonwealth’s fire departments, which would extend the provisions of section 100 of Chapter 41 of the General Laws, relative to the indemnification of police officers and firefighters, and section 100B of Chapter 41 relative to the indemnification of retired police officers and firefighters to any permanent crash crewman, crash boatman, fire controlman or assistant fire controlman employed at Logan International Airport, members of the Massachusetts military reservation fire department and members of the 104th fighter wing fire department. This bill would also extend the provisions of Chapter 32, sections 94, 94A and 94B regarding heart, lung and cancer presumptions to members of the 104th fighter wing fire department or members of the Massachusetts military reservation who successfully pass a physical upon entry into service. These bills would add to the already large employee pool eligible for indemnification under Chapter 41, and for payments under the heart, lung and cancer presumptions, significantly increasing the already astronomical municipal pension and health care liabilities.

We ask the Committee to give H. 4104 an unfavorable report.

Binding Arbitration

The MMA opposes S. 1577, An Act providing for binding arbitration for firefighters and police officers. This anti-taxpayer bill would override a key provision of Proposition 21⁄2 and the will of the voters of Massachusetts, by allowing an unaccountable arbitrator to unilaterally impose costs on cities, towns and local taxpayers. The bill would allow public safety unions to petition the Department of Labor Relations to initiate arbitration proceedings that are final and binding on the parties and the legislative body. If passed, this bill would walk back several decades of labor relations for public safety employees in the Commonwealth.

In 1977, the Legislature created the Joint Labor Management Committee (JLMC) to oversee collective bargaining negotiations between municipal police officers or firefighters and municipalities. Until that time, arbitration awards were binding on municipalities. In 1980, the voters enacted Proposition 21⁄2 and repealed final and binding arbitration, and mediation became the means for parties to resolve disputes, but the JLMC began to accumulate a significant backlog. In 1987, the Legislature enacted Chapter 589 of the Acts and Resolves of 1987, allowing the parties to invoke limited arbitration as an additional tool of dispute resolution. Decisions resulting from this process are binding upon a municipality’s executive body and the employee organization, but are subject to the approval of funding by a municipality’s legislative body (city or town council or Town Meeting), thus the “limited” designation. In 1990, JLMC developed a process by which parties may voluntarily agree to limited arbitration, thereby reducing the time to a settlement agreement.

In addition to limited arbitration and voluntary limited arbitration, the JLMC uses a variety of dispute resolution methods. Often, JLMC members assist in mediations and in many cases, mediation alone will resolve a dispute. The JLMC and the dispute resolution processes that were put in place decades ago were passed to facilitate resolution of disputes more expeditiously and before they reach arbitration. Removing the resolution of disputes from JLMC, a body that is intimately familiar with public safety collective bargaining and the parties involved, would be a major step backward. Even worse, it would be a grave mistake to allow unaccountable arbitrators to impose costly and even unaffordable contract awards on local taxpayers, with no ability to debate and decide at the local level.

The bill would also undermine collective bargaining by creating an economic incentive for the employee representatives to inflate their demands and maximize the number of issues in dispute during negotiations in order to facilitate an impasse and seek a higher payoff in an arbitration proceeding.

S. 1577 would allow arbitrators to override the will of the voters, and to impose unaffordable costs on cities, towns and local taxpayers. Because the limits of Proposition 21⁄2 would stay in place, unaffordable awards would force cities and towns to slash other essential services to residents and businesses. This bill would create fiscal havoc, and should be rejected.

We ask the Committee to give S. 1577 an unfavorable report.

Public Employee Pensions and Veteran Retirement Benefits

The MMA opposes several bills that would increase retirement benefits:

S. 1499, An Act to provide fair and affordable public retiree benefits, would increase public retiree benefits across numerous statutes, drive up costs to local taxpayers, and increase the already massive unfunded OPEB liabilities facing communities.

H. 2294, An Act protecting retirees from a reduced, modified or changed retirement allowance due to the inclusion of vacation buyback as regular compensation, would provide that the retirement allowance of any retired member would not be reduced by amounts paid as vacation buyback. The bill would also require that any amount paid to an active member for vacation buyback upon which contributions were made and included in any applicable collective bargaining agreement or individual employment contract in effect on May 1, 2018 shall continue to be included in the definition of regular compensation during the term of such agreement. After June 30, 2021, such payment would not be considered regular compensation.

H. 2232, An Act to provide fair and affordable public retiree benefits. This bill would increase the annual retirement allowance, pension or annuity subject to cost of living adjustments from $13,000 to $18,000 as of July 1, 2019, and replace the $18,000 annual retirement allowance with incremental percentage increases equal to the maximum social security benefit for an individual worker retiring at full retirement age every four to five years between July 1, 2020 and July 1, 2037. The bill would also exclude individuals who retire before the contribution percentage change from reductions made in the governmental unit’s contributions to retirees’ health premiums, and would prohibit the maximum amount of deductibles and copayments paid for covered services of group health insurance from exceeding $2,500 for individual coverage and $5,000 for family coverage.

H. 2346 and S. 1503, An Act relative to the veteran allowance for public retirees, would authorize an additional $50 for each year of creditable service for persons retiring from Group 1, 2 or 4. The provision must be accepted at local option by a city or town, and the retirement increase is capped at $1,000.

The MMA strongly opposes these bills because there has been no actuarial analysis of the cost impact on local retirement systems and taxpayers. Nearly every retirement system is struggling with large unfunded liabilities, and pension payment obligations as well as other post-employment benefit liabilities are crowding out available funding for key municipal and school services. By definition, all of these bills would add new unfunded obligations to every municipal retirement system in Massachusetts, and would clearly increase the unfunded ratio of every system, placing a heavier financial burden on local taxpayers. Moreover, capping maximums at lower rates would drive up the cost of premiums, most of which are borne by local taxpayers, and impose a new unfunded and unaffordable mandate on cities and towns. Setting a fixed dollar amount in statute would also result in outdated limits within months of enactment and necessitate legislative action each year in order to keep pace with the growth of inflation and medical costs. This remains an ineffective way to enact policy over the long term.

We ask the Commission to give S. 1499, H. 2294, H. 2232, H. 2346 and S. 1503 an unfavorable report.

Creditable Service for Retirement

The MMA opposes several bills that would credit employees for service or include new members under the governing statute for public employment retirement, Massachusetts General Laws Chapter 32:

H. 2274, An Act relative to veteran retirement benefits, would grant up to four years of creditable service to a member of the state retirement system for military service, including in the Massachusetts National Guard and Active Reserves who served prior to July 24, 1996. Even though communities would adopt this bill by local option, the underlying policy is unaffordable, as this would increase the unfunded pension liability and cost to taxpayers in every accepting retirement system.

S. 1581, An Act relative to veterans’ creditable service, would establish that a member of a retirement system who is also a veteran be credited with all periods of service for which the veteran was previously employed in any governmental unit, regardless of whether the retirement system in which the veteran is currently a member differs from the governmental unit in which he or she previously became a member. Again, this would increase the unfunded pension liability and taxpayer cost in every retirement system.

H. 2370, An Act expanding creditable service benefits to veterans who have served in the armed forces of the United States. This bill would entitle veterans to up to five years of creditable service for time in the U.S. armed forces, and would condition the creditable service upon a subsequent permanent appointment as a permanent member of a fire or police department.

These bills would untenably raise the unfunded municipal pension liability and other-post-employment benefits (OPEB) liability for local taxpayers and communities. Cities and towns are already facing an unfunded OPEB liability of over $30 billion, and this legislation would burden the taxpayers of Massachusetts by expanding already unaffordable OPEB and pension costs. The MMA strongly opposes any legislation that would add to these liabilities.

Importantly, it is impossible to quantify the magnitude of the new cost that would be imposed on taxpayers without an actuarial analysis of each of these bills. This alone is sufficient reason to oppose these measures. Awarding members more creditable service would certainly increase pension costs and municipal OPEB liabilities. Without an actuarial cost analysis and a consensus understanding regarding the cumulative effect of this legislation and similar legislation from past sessions, and a funding source from the Commonwealth to prevent additional burdens on local taxpayers, we believe the Committee should reject these bills outright.

We ask the Commission to give H. 2274, S. 1581 and H. 2370 an unfavorable report.

Imposition of Veterans Hiring Preference on Non-Civil-Service Cities and Towns

The MMA opposes H. 2377, An Act protecting veterans’ preference in hiring practices, which would, among other things, require cities and towns that are exempt from civil service laws to provide a preference to veterans when hiring police officers and firefighters. This bill would usurp municipalities’ ability to manage their workforce in a way that makes sense at the local level for individual cities and towns.

Under the current law, municipalities may, through home rule petition, request an exemption from Chapter 31, the civil service law. That statute gives veterans preference on the list of eligible civil service positions, but cities and towns that are exempt from the statute do not have to provide the preference. Most municipalities that leave civil service, however, adopt a policy affording some type of preference in hiring for veterans on their own terms. This bill would – retroactively – take this ultimate hiring authority away from those municipalities that have already opted out of Chapter 31 and make them subject again – despite the passage of special legislation through the home rule petition process. This would render the home rule petition process moot, and would inappropriately transfer hiring authority away from local officials. This state intrusion into an inherently local hiring process is unwarranted and unjustified.

We ask the Committee to give H. 2377 an unfavorable report.

In summary, cities and towns have grave concerns regarding many of the bills before you at today’s hearing, and we ask you to protect the interests of communities and taxpayers. If you have any questions or need additional information on any of these measures, please do not hesitate to contact me or MMA Senior Legislative Analyst Lisa Adams at (617) 426-7272 at any time.

Thank you very much.

Sincerely,

Geoffrey C. Beckwith
Executive Director & CEO