Gov. Tomblin signs West Virginia OPEB funding bill (video)

By WV Watchdog on February 20, 2012
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Gov. Earl Ray Tomblin signs SB469, providing a funding mechanism for West Virginia’s $5 billion OPEB debt. (Photo/Steven Allen Adams)

By Steven Allen Adams | West Virginia Watchdog

CHARLESTON — With the stroke of a pen, Gov. Earl Ray Tomblin signed a bill making West Virginia the first state to deal with its multi-billion dollar retiree health care debt.

Tomblin held a press conference this afternoon to sign SB469, joined by members of the West Virginia Legislature. The bill is the eighth piece of legislation passed by the House of Delegates and the state Senate, and it’s the third bill signed by the Governor during the 2012 legislative session.

“Today, we take the last step in ending our long-term debts,” Tomblin said. “With my signature, the West Virginia taxpayers will begin to save. Rating agencies will look more favorably on West Virginia as we institute a plan to pay off OPEB. That means lower interest rates on projects that need financing, and that is true savings.”

SB469 dedicates $30 million annually to the West Virginia Retiree Health Benefit Trust Fund to pay off the state’s $5 billion other post-employment benefits (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. 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.

“The immediate savings will be in our schools, because with my signature we’ll be relieving our county school boards of $485 million in future OPEB liability payments,” Tomblin said. “Today, the counties that have saved money for the payment towards this debt can now utilize $20 million that they have saved for their local needs. As a former school teacher, I personally know what this means for the teachers, but most importantly what it will mean for the students in the Mountain State.”

The West Virginia Legislature made two attempts last year to address OPEB costs, including providing $1 billion to pay down OPEB over 20 years by raising the cigarette tax from .55 cents per pack to $1.55 per pack. Another proposal included transferring some Rainy Day funds toward OPEB. Both bills, generated in the Senate, failed when senator and delegates couldn’t agree on a funding mechanism.

“I can frankly say that one of my greatest disappointments in last year’s session was our inability to finalize this OPEB issue at the conclusion of the session in those last few days,” said Senate President Jeff Kessler (D-Marshall). “Now we’re not only ahead of the curve, we’re leading the charge and getting things done.”

Sens. Robert Plymale (D-Wayne) and Brooks McCabe (D-Kanawha), members of the Senate OPEB subcommittee, as well as Del. Scott Varner (D-Marshall), spoke in favor of the legislation.

You can watch highlights from the press conference below:

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