House Republicans raise concerns about bill paying down West Virginia’s OPEB debt
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By Steven Allen Adams | West Virginia Watchdog
CHARLESTON — Republicans in the West Virginia House of Delegates tried to amend Gov. Earl Ray Tomblin‘s legislation to pay down the state’s retiree health care debt after raising concerns about the bill’s specifics.
House Republicans offered five amendments to SB469, with all five failing. Two failed by voice vote, but three had roll call votes the saw some Republicans cross the aisle to defeat their fellow Republican’s amendments.
SB469 would dedicate $30 million annually to the West Virginia Retiree Health Benefit Trust Fund, transferring $5 million each month to pay off the state’s $5 billion other post-employment benefit (OPEB) debt by 2036. Another $5 million annually would be transferred into a trust fund for public workers hired after July 1, 2010.
The $35 million would come from personal income tax revenue currently being used to pay of the Workers’ Compensation Old Fund, which should be available by 2016 when the state retires the debt.
But House Republicans have three major concerns about SB469. In an interview Monday with West Virginia Watchdog, House Minority Leader Tim Armstead (R-Kanawha) said House Republicans were fine with the $30 million plan to pay down OPEB, but had concerns about other specifics in the bill.
Section D of SB469 gives the director of the Public Employees Insurance Agency (PEIA) the authority manage health care delivery costs and adopt programs the manage long-term costs.
“They’re characterizing them as cost-saving measures, but if you go back and look at it, several of them relate to provisions of the Obamacare bill and other health rationing provisions that give a lot of people in our caucus some concern,” Armstead said. “It really health care rationing; that’s exactly what it is. Now we’re forcing the same requirements on PEIA in West Virginia.”
Some of these powers include limiting or eliminating the number of employees and retirees who are re-admitted to a hospital for the same diagnosis within 30 days, coordinating the care of employees and retirees with chronic illnesses, and recommending programs to drive behavior and control costs.
“There’s really no reason for all of those to be in a bill that relates to how we fund PEIA and the OPEB liability going forth,” Armstead said. “Those don’t need to be in a bill that sets up the funding mechanism for OPEB. They put those in there and they cause a lot of controversy.”
House Republicans are also concerned about the $5 million set aside annually in the bill. The bill has very few specifics about how the fund – which would benefit state employees hired after July 1, 2010 – would be used.
“I think there is consensus among Republicans and Democrats to take this $30 million that’s going now to Old Fund Workers’ Comp,” Armstead said. “Then they go and add an additional $5 million that is going to be set aside in a fund, but no one can say exactly what they’re going to use it for. It’s a new liability for the state.”
Lastly, Armstead said the bill violates the state Constitution by trying to take on the debt of the counties. The bill also provides relief for county school systems, with the state taking responsibility for retiree health care costs within the school aid formula, though schools would have to take responsibility for amounts billed outside the school aid formula.
However, Article 10 Section 6 of the State Constitution states that “The credit of the state shall not be granted to, or in aid of any county, city, township, corporation or person; nor shall the state ever assume, or become responsible for the debts or liabilities of any county, city, township, corporation or person.”
“There is concern about the whole constitutionality of this bill in and of itself, based primarily on the fact that the Constitution says the state cannot assume the liabilities of the counties,” Armstead said. “There is legal case law that says that teachers are county employees. We’re assuming the liability for their pensions at the state level, so the question is can they constitutionally assume a liability that is legally a county liability?”
One amendment, offered by Del. Daryl Cowles (R-Morgan), would have made all county school employees impacted by the bill state employees. Another amendment, by Del. Mitch Carmichael (R-Jackson), would have eliminated the $5 million fund. Two amendments offered by Armstead would have either eliminated Section D of the bill, or made slight changes, while another Armstead amendment would have eliminated the bill’s language altogether, replacing it with a bill focused solely on providing $30 million annually for OPEB and addressed how county schools show the liability. All five amendments failed.
The bill is on third reading tomorrow in the House.
- West Virginia Senate passes Gov. Tomblin’s OPEB fix (audio) (westvirginia.watchdog.org)
Posted under Employment, Finances, Governor, Health Care, House of Delegates, Legislation, Legislature, News, Spending, West Virginia.
Tags: $30 million, $5 million, Armstead, Earl Ray Tomblin, House of Delegates, OPEB, Other postemployment benefits, Republicans, Tim Armstead, West Virginia
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