Wednesday, November 18, 2009
Today, during the November special session recently called by Governor Manchin a bill was introduced that would ease a county board of education’s financial burden of carrying liabilities for retiree’s health care benefits, know as OPEB (other post employment benefits). Current accounting principals require governmental agencies to include in liabilities an amount that equals future costs for medical expenses of retirees. This bill allows counties to omit OPEB calculations in liabilities for fiscal year 2010.
While the bill addresses the situation for one year, it is only a band-aid. A long term solution must be found. WVEA has engaged and continues to engage in work groups to find a solution to the problem. Furthermore WVEA has filed a lawsuit relating to the matter, stating that the liability does not belong to County Board of Educations but the State.
The bill is House Bill 405 and Senate Bill 4005. In the House, it was referred to the committee on finance. Today the bill was taken up and passed out of the House Finance Committee. The bill was presented to the full house where it was advanced to 3rd reading. The bill will be considered for passage tomorrow. If the bill passes it will be sent to the Senate for consideration. The Senate version of the bill was referred to the Committee on Finance, where it remains.
House bill
http://www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=hb405 intr.htm&yr=2009&sesstype=4X&i=405
Senate Bill
http://www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=sb4005 intr.htm&yr=2009&sesstype=4X&i=4005
Wednesday November 18, 2009
Senate panel axes Manchin's offer on retirement costs
by Lawrence Messina
The Associated Press
CHARLESTON, W.Va. (AP) - West Virginia school boards worried about paying for retiree benefits may go without temporary relief from the Legislature, after the Senate Finance Committee voted Wednesday to reject Gov. Joe Manchin's special session proposal.
The governor wants lawmakers to allow government employers to pay just what they owe their current retirees in "other post-employment benefit" costs this budget year. A nearly unanimous committee instead favored pursuing a long-term solution that also addresses future, promised benefits during the 2010 regular session. It starts in January.
"I don't think we should be doing this in a special session," said Sen. Robert Plymale, D-Wayne. "We need to do a lot more work on this, from the Senate's standpoint."
Manchin spokesman Matt Turner noted that the House has yet to act on its version of the bill.
Among West Virginia's government employers, county school boards have raised the loudest concerns over the costs, which mostly involve health care and life insurance coverage promised to workers once they retire.
The state's Public Employee Insurance Agency has estimated a $7.8 billion funding shortfall between on-hand assets and these retirement-related costs for all of West Virginia's state, county and local government employers.
The Legislature in 2006 told PEIA to bill each of the employers for its contribution toward the liability annually. Any unpaid amount ends up on that employer's books as a current debt.
More than half the state's 55 county school boards have threatened to sue. They argue they lack the funds to cover the annual required contributions, while listing them as current debts threatens their ability to issue low-interest financing bonds.
Manchin administration officials have brokered meetings to avoid a lawsuit, and say the legislation offers breathing space for that process.
Plymale and other committee members greeted the boards' threat to sue with a bring-em-on stance.
" If this suit goes on to a court of law, and a court of law says, 'These are your employees, this is your debt,' what are they going to do then?" asked Sen. Roman Prezioso, D-Marion and an educator in that county, among the first to consider legal action.
But Prezioso also noted the counties might be correct that the debt is the state's. While teachers and school service workers are considered county employees, they get their health care from the state's Public Employee Insurance Agency. That agency sets the benefit and contribution rates.
"Somebody owes this debt, and somebody's going to have to pay it, and that's going to be the people of West Virginia," said Chairman Walt Helmick, D-Pocahontas.
Sen. John Unger, D-Berkeley, said West Virginia would be "cooking the books" by pretending for one year that this debt is not owed, for bond-selling purposes.
"I can't believe we're actually discussing this," he said. "It may not be illegal, but it seems unethical if we're starting to shift debt around without anyone taking responsibility for it."
"We are doing nothing dishonest, nothing unethical," replied PEIA Director Ted Cheatham, who took issue with Unger's read of the proposal.
Sen. Brooks McCabe appeared to be the sole committee member to support the bill in a voice vote. The Kanawha County Democrat cited the counties' fears about their bonding powers.
"As unpleasant as this may be, I think it's probably important to pass it," McCabe said.
The special session began Tuesday, and Manchin placed around a dozen items on its agenda. Lawmakers hope to finish by the time their previously scheduled series of interim study meetings end Thursday.