Print |
E-mail to a friend
NEWS
Pension bill loses funding
The West Virginia State Capitol building in Charleston, W.Va. (Photo taken Thursday, February 21, 2008).
CHARLESTON -- A Senate panel on Monday made major changes to a bill designed to help West Virginia cities with ailing police and fire pension funds.
The Senate Pensions Committee eliminated $15 million in state funding that would have gone to shortfalls in the municipal pension funds and help volunteer fire departments provide "length of service" benefits to members. The money would have come from the tax on liquor sold through West Virginia's state-controlled warehouse, according to the version of the bill (HB 3158) that the House of Delegates sent the Senate last week.
Under the new version, the municipal pension plans would receive approximately $2.6 million a year from existing tax revenue that now goes to teachers' retirement.
Volunteer fire departments would not receive any new funding, but would be allowed to raise money privately for pension-like benefits.
Sen. Bob Plymale, D-Wayne, added an amendment to the bill that allows West Virginia's larger cities, including Huntington and Charleston, to close their existing pension plans and put future hires into a state-sponsored plan. Although the Public Employees Retirement System and pension plans offered to state troopers and deputy sheriffs were mentioned, cities would decide what state-sponsored plan to use, Plymale said.
Cities then could issue bonds to pay off their unfunded liabilities -- Huntington's stands at $130 million -- and dedicate an existing tax or new one such as a sales tax or occupation tax to make bond payments.
Plymale said the amendment came out of discussions with Huntington Mayor Kim Wolfe and some of the city's council members.
"It's obvious Huntington can't afford it," Plymale said, referring to the existing plans. "There is talk about receivership there and that is very real.
"I don't live in the city of Huntington, but if I did, I would be very concerned about that."
Plymale said his amendment may be the only way Huntington can get help in dealing with its pension problems. There is little support for dedicating state funding in the Senate, he said, because there is widespread disagreement about whether the state is partially responsible for cities' pension problems.
At issue is whether the state forced cities into an alternative funding method in 1991 that eventually sent many of their unfunded liabilities skyrocketing.
"Until we get that disagreement settled, there's no state money at all," Plymale said.
Representatives for municipal police and fire unions expressed frustration about the new version of the bill after the meeting.
Carl Eastham, a Huntington firefighter and secretary/treasurer of the Association for Professional Firefighters of West Virginia, said he fears cities would choose the cheapest retirement system, not the one best fit for police officers and firefighters.
"PERS is not set up for people in emergency services," he said. "You could have people who climb ladders and chase down criminals for a living being forced to work into their 60s before they can retire."
Eastham also said the bill would allow for different municipal retirement plans across the state. That could put some cities at a serious recruiting disadvantage to those that offer better retirement benefits, he said. Currently, state law dictates municipal pension benefits.
The bill now heads to the Senate Finance Committee. The Legislature's regular session ends at midnight Saturday.
With just a few days left, Charleston Mayor Danny Jones said he's not sure a resolution can be reached.
"The House's position is so diametrically opposite of the Senate," he said. "The House wants (funding for volunteer firefighters) in the bill. They understand and believe that they do have some liability. The senate's position is different.
"Whether the conferees of these two houses could come up with a solution is somewhat questionable."
