Letter to the editor: COLA decision impact
Until January 1, 2018, the City of Stephenville policy with Texas Municipal Retirement System (TMRS) was that each year the retirees’ annuity would increase in accordance with 70% of the CPI (Consumer Price Index). That means an adjustment equal to 70% of the amount of inflation observed during the previous year. For example, if the CPI was reported to be 1.50%, the retiree pay would increase by 1.05%. So an annuity of $1,000/month would realize an increase of $10.50/month and the new annuity would be $1010.50/month. That amounts to an increase of $126.00 for the year.
The CPI in 2014 was 1%; in 2015 - 1%; in 2016 - 0.5% and in 2017 -0.5%. Inflation was low, reflected by the small CPI and the COLA was also minimal. Then the COLA was eliminated for 2018 and all following years.
In 2018, the CPI grew to 2%; in2019 it was 2.8% and in 2020 it was 1.6%. So each year since 2017, the City retirees have fallen farther and farther behind when compared to inflation.
Expenditures for food and household items increased by 25% from 2017 through 2019. A dozen eggs in 2017 cost $2.99 - in 2019 it was $3.22; a loaf of bread went from $1.69 to $1.95; a 20 lb. bag of dog food was $11.93 in 2017 and $13.88 in 2019. That annuity from 2017 of $1000/month would only buy $750 in groceries in 2019. This “price creep” is not only seen in groceries and household goods, but in services and taxes and every other aspect of life.
No explanation was provided to retirees. The 2017/18 Council picked the “low hanging fruit” of the retiree COLA to eliminate. The ordinance implementing this change was buried as item 6 in the consent agenda at the September 5 meeting. This certainly doesn’t seem like transparency and appreciation.
Bob Self/formerly of Stephenville