Posted: Sep 12, 2012 6:50 AM by Marnee Banks - MTN News
Updated: Sep 12, 2012 7:04 AM
HELENA- Tthe Montana Legislature gave Governor Brian Schweitzer's (D-MT) pension plan a green light on Tuesday in a bipartisan vote.
The State Administration & Veteran's Affairs Committee voted to move two major bills forward which address a nearly $4 billion shortfall in the state's pension system. They're Schweitzer's ideas about how to make the retirement plans financially solvent.
State Senator Larry Jent (D - Bozeman) sits on the SAVA committee and has carried multiple pension bills in the past.
"This is the number one fiscal issue facing Montana," Jent says.
The first bill addresses the Teachers Retirement System (TRS). In it, teachers are asked to pay 1% more, and new teachers will have to sacrifice some benefits, but the school districts aren't forced to pick up the tab.
The second bill looks at the Public Employees Retirement System (PERS). It asks employees & employers both to pitch in an extra 1% in order to foot the bill.
Both bills require a one time cash infusion from the State of Montana. The TRS will tap oil and gas revenues, and the PERS will use coal tax money.
Schweitzer's Budget Director Dan Villa says it's mathematically impossible to make the system solvent without asking everyone to sacrifice.
"We believe we have a constitutional bill and it fixes the system," Villa says.
State Senator Dave Lewis (R-Helena) says it just leaves too many unanswered questions.
"I'm not going to vote for them until I understand precisely who is going to get stuck paying for it," Lewis says.
The Montana County Attorney's Association Lobbyist, Mark Murphy, says he has never seen anything like this in all his years working on state pension systems.
"Funding the entire system, whatever actuarial unfunded liability there is, on the backs of local governments and employees is just unacceptable," Murphy says.
However, the state's major unions MEA-MFT and the Montana Public Employees Association (MPEA) are supporting the bills even though they are being asked to compromise.
MPEA Representative Tom Schneider says these proposals aren't just about numbers.
"You are dealing with people's lives. Think of the people who will retire, and what they will live on when they can no longer work," Schneider told SAVA committee members.
Now these bills will head to the Legislative Finance Committee where lawmakers will see how they fit into the bigger budget picture.
Lewis, who sits on that committee, says he's hopeful they will come up with a solution. He says it just might not be Schweitzer's solution.
Regardless of the Legislative Finance Committee's decision, any lawmaker could take the bills and carry them next session. However, they will need the Governor's signature, and with it being an election year, these proposals become moving pieces.