West Virginia House of Delegates passes Gov. Tomblin’s fix for OPEB (audio)

By westvirginia on February 9, 2012
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By Steven Allen Adams | West Virginia Watchdog

CHARLESTON — If senators agree with changes to the legislation, Gov. Earl Ray Tomblin can add finding funding for the state’s multi-billion dollar retiree health care debt to his list of successes since officially becoming Governor in November.

The West Virginia House of Delegates passed SB469, Gov. Tomblin’s proposal to pay down the state’s $5 billion other post-employment benefit liability. Tomblin listed the other post-employment benefit (OPEB) debt as a priority in his State of the State address last month.

SB469 would dedicate $30 million annually to the West Virginia Retiree Health Benefit Trust Fund to pay off the state’s $5 billion OPEB debt by 2036. Another $5 million annually would be transferred into a trust fund for public workers hired after July 1, 2010.

The bill passed 83 to 17 with most of the opposition coming from House Republicans, who opposed several sections of the bill, including 12 cost-cutting measures, a $5 million fund set up for workers hired after July 1, 2010, and provisions of the bill that allowed the state to take on the OPEB debt of county school systems.

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. 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.

House Republicans attempted to push five amendments to the bill yesterday dealing with focusing the bill strictly on funding the OPEB debt and nothing else. Those amendments failed with the support of fellow Republicans that disagreed with House Republican leadership. Those concerns were still on the mind of House Minority Leader Tim Armstead (R-Kanawha) when he spoke out against this bill this morning.

“It’s unfortunate that this body has been put into the position where we we’re trying to solve a problem and we all want to do it together and we all basically agree that this $30 million solution is a good solution overall, in concept and in theory,” Armstead said. “Then we get to the meat of the bill and the language of the bill, and that is where the problem is.”

Much of the floor debate today revolved around the constitutionality of SB469. House Republicans pointed to Article 10 Section 6 of the state Constitution, which says that the state can’t become responsible for the debts of counties. Del. Harry Keith White (D-Mingo), Chairman of the House Finance Committee, said that the OPEB debt of county school systems would remain with the counties, because because of the $30 million fund those liabilities would be reduced.

“I don’t know how each of the counties are going to do their accounting,” White said. “More than likely they will still show the potential liability and footnote it in their financial statements. But again…having a payment stream over a 20-year period of time, that takes care of the liability for these counties going forward and any employees they have in formula, that frees that money back up for them to…hire people and put them back to work.”

But Del. Patrick Lane (R-Kanawha) asked whether money in the OPEB fund would be distributed to the counties. White said funds would not be sent to the counties, but Article 10 Section 6a of the state Constitution says the state can set aside tax for the benefit of the counties, but those funds must be distributed to the counties.

“I’ve struggled with this issues, because I think we definitely need to deal with this debt,” Lane said. “It’s been hanging out there and it’s going to have a negative impact on our counties and certainly our state if we don’t deal with it. The problem I have is a constitutional problem.”

Other Republicans spoke out against the bill, including Dels. Rick Snuffer (R-Raleigh), Daryl Cowles (R-Morgan), and Larry Kump (R-Berkeley).

“This bill before us reminds me of ‘The Good, the Bad, and the Ugly,’” Kump said. “The reduction of the liability is very, very good, but it’s outweighed by the bad and the ugly in the other parts.”

Del. Scott Varner (D-Marshall) spoke in favor of the bill. Varner, who is not seeking reelection, said he sought office to deal with these kinds of debt issues.

“This is truly a historic day for West Virginia,” Varner said. “It’s the last of the unresolved debt issues. After the passage of this bill, bond rating agencies will look at us in even a better light because we’ve addressed this issue.”

The bill returns to the state Senate tomorrow, where lawmakers will decide whether to concur with the House amendment. If the Senate agrees, the bill will be on its way to Gov. Tomblin for his signature.

Listen to the full audio of the House floor debate below or click here (38 minutes):

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Posted under Audio, Featured, Finances, Governor, Health Care, House of Delegates, Legislation, Legislature, News, Spending, West Virginia.
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