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Administration pitches Municipal Empowerment Act to ease staffing shortages and study local OPEB liabilities
Summary
Administration witnesses asked the committee to advance parts of the Municipal Empowerment Act that would allow time-limited rehiring of retirees for positions designated as in critical shortage and would establish an OPEB commission to study the state's large post-employment health liabilities.
The Executive Office for Administration and Finance told the Joint Committee on Public Service that provisions in the Municipal Empowerment Act (sections referred to this committee) aim to give municipalities time-bound tools to address critical local staffing shortages while the administration works on longer-term recruitment pipelines.
Danielle Cerny and Sean Cronin described a proposed "critical shortage" designation, modeled on the Department of Elementary and Secondary Education process, that would allow a retired state or municipal employee to return to work without being subject to current caps for a two-year period; extensions would be permitted only with evidence the shortage persists. The testimony said the administration revised the proposal to include a three-year sunset for the exemption in consultation with the inspector general to limit long-term unintended consequences.
Officials also proposed reestablishing an OPEB commission to convene local officials, labor and finance experts to review how retiree-health liabilities might be reduced. The administration cited an OPEB liability estimate (2021 PERAC or TARC report referenced) of approximately $53,000,000,000 and contrasted that with a roughly $15,000,000,000 unfunded pension liability figure presented earlier in testimony. The administration said municipalities are not legally required to fully fund OPEB liabilities and called the total a "massive liability" on municipal balance sheets.
Local government witnesses — including the Massachusetts Municipal Association, town HR officials from Danvers and East Hampton — supported the time-limited rehiring tool as a narrow, targeted option to preserve essential services while communities build staffing pipelines and training programs. They emphasized documentation, oversight, and a sunset, and said the policy should be used as a last resort, requiring demonstrated recruitment efforts.
Committee members asked how the designation would avoid being gamed; administration witnesses said applicants would need to show meaningful recruitment efforts and the application process would include requirements similar to DESE's critical-shortage process.
Next steps: the committee will consider testimony and fiscal analyses for sections of H.56 and related companion provisions before any reporting or vote.
