Pension fixes lurch toward finish line

2013-04-20T13:41:00Z 2013-05-07T19:47:09Z Pension fixes lurch toward finish lineThe Associated Press The Associated Press
April 20, 2013 1:41 pm  • 

HELENA — Two fixes for the state's pension systems are nearing final approval, despite lingering concern from Republicans over the cost, after the House advanced the measures in a pair of close votes Saturday.

Some Republicans joined Democrats to advance the public employees pension fix in a 55-45 vote toward one more final legislative vote before it goes to the governor's desk. The House also voted 53-47 not to negotiate differences with the Senate on the teachers retirement fix. It faces two more votes in the chamber.

The two bills ask both employees and their local and state public employers to pay more, while reducing benefits a little. They are projected to fix a projected $4 billion shortfall in the pensions for public employees and teachers.

"I think this bill is absolutely essential to fixing a pensions system that is broken," Rep. Bill McChesney, D-Miles City, said of his bill dealing with the public employee's system.

He argues that delaying a fix only makes it more costly, and threatens bond ratings for state and local governments.

But many Republicans argue the pensions cost taxpayers too much. They said pouring more money, to the tune of $40 million per year, into the system won't work and argued projections are flawed.

"You are not only kicking the can down the road, you are filling it up with taxpayer money," said Rep. Nancy Balance, R-Hamilton. "The money is going to have to be paid by the taxpayers."

Many conservatives entered the session hoping to find a way to get rid of the pensions, perhaps replacing them with a defined contribution like a 401(k) retirement savings account common in the private sector. But even supporters of that plan said it only would have applied to new employees since the state has a contractual obligation to current employees and retirees.

Those conservative plans to end the pensions were killed under opposition from Democrats, the governor's office and other Republicans. They pointed out that it actually costs much more in the near-term to end the pensions system because future liabilities would have to be paid much sooner as new money flowing into the system dries up.

House Minority Leader Chuck Hunter chastised Republicans for trying to scuttle a plan that stems from a two-year interim study — and a lot of votes this session in GOP-controlled committees in both Houses. He pointed out Republicans held a two-to-one advantage on many of those panels.

"This bill has been vetted very well. And it has been a majority vote of your members," Hunter said. "The solutions that have been arrived at are good solutions. They are practical solutions."

Supporters pointed out that local governments are asking for a fix, even though they will also have to pay more into the system.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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