The $4 billion question facing the Legislature’s new pension committee

Members of the Legislative Joint Select Committee on Pensions meets in the Capitol Tuesday

The 12-members of the Montana Legislature’s new Joint Select Committee on Pensions have a tough job ahead of them–finding a solution to the state’s indebted retirement systems that will pass both a Republican-controlled Legislature and a Democratic Governor’s Office.

Latest figures put the total debt faced by Montana’s pension programs at over $4 billion over the next 30 years. The vast majority of this ‘unfunded liability’ stems from the state’s two largest  pensions, the Public Employee Retirement System (PERS) and Teachers Retirement System (TRS).

The Legislature’s majority leadership, Senate President Jeff Essman (R-Billings) and House Speaker Mark Blasdel (R-Somers) appointed the eight Republicans and four Democrats to the pension committee, which Lee Newspapers points out caused some frustration from the minority, who feel 8-4 doesn’t accurately reflect the Republican-Democratic split in the Legislature.

The pension committee invited members of the House and Senate State Administration Committees to listen in on the first meeting, hearing broad descriptions of the problems from legislative staff.

“It definitely is like trying to drink from a firehose on day one,” said first-term Representative and House State Administration Committee Member Casey Schreiner (D-Great Falls) about the complexity of the issue. It’s one that has been labeled as a top-priority for the 2013 Legislature. “Every citizen in the state of Montana has some vested interest in us having our pension systems where they need to be for longevity purposes,” Schreiner said.

Democratic Governor Steve Bullock has released a proposal to fix the pensions, one which closely resembles the one put out by former Governor Brian Schweitzer last year. It calls for higher contributions from public employees, their employers, and an infusion of revenue from natural resource development. Bullock calls it a balanced approach that has the support of the state’s largest teacher’s union (MEA-MFT) as well as the Montana Association of Counties and the Montana League of Cities and Towns.

Pension committee chair Senator Dave Lewis (R-Helena) hopes for a different approach. He wants the state to move away from the current pension system and put new state employees on 401(k) plans, an idea rejected by Democrats. That would put less financial responsibility on the state but employees would have less retirement certainty due to changes in the stock market.

“I think it’s inevitable,” Lewis said. “For public employees it’s going to be very difficult to get there, because we have to pay off the liability to the existing retirees, but we’re still going to have to move toward that.” Sen. Lewis has put forward his ideas in a bill for consideration by the committee, but he’s certainly not the only one.

“Almost every legislator up here has something they think we should fix,” Lewis said about the committee. He says his goal is to finalize the proposals from the Joint Select Committee on Pensions for presentation to the full legislature by the end of February.

Funding for crime prevention programs tabled in Senate committee

The Senate Judiciary Committee hearing Crime Prevention Group funding bill Friday

The Senate Judiciary Committee Friday tabled a bill which would create a fund for a variety of crime prevention programs in the state, from neighborhood watch organizations to drug education programs in schools. There was wide support for the bill’s core concept, but lawmakers did not agree with the funding source, a $10 surcharge to those convicted of crime.

Bill Sponsor, Huntley Republican Senator Taylor Brown says crime prevention efforts in communities are very successful. He says these groups are mostly run by volunteers and save Montanans money in law enforcement costs. They often struggle for funding themselves.

“This crime prevention bill is about much more than just starting a neighborhood watch program or using McGruff the Crime Dog to teach early awareness to your grandchildren, although it very well may help support efforts like that,” Brown said. He says the surcharge is a ‘user pays’ concept allowing “the ones who cause the crime to pay for crime prevention.”

That funding would create a grant program for crime prevention groups. Butte Addictions Counselor Dan Haffe says bad things happen to good people and the state has not worked hard enough to establish prevention programs in schools.

“I have taught hundreds of DUI classes,” Haffe said. “Hundreds of MIP classes and I see this as an opportunity to make great strides in working with people before they ever get to that felony status.”

Crime prevention groups themselves stood up in favor, the Montana County Attorneys Association, and the Montana Sheriffs and Peace Officers. Yet, spokesman Jim Smith pointed to what ended up being the problem.

“The surcharge is the sticky wicket here,” he said.

Montanans convicted of crimes already usually spend about $85 in surcharges. Public Policy Director of the Montana ACLU Niki Zupanic says surcharges are creating a system where those convicted of crimes are being saddled with funding parts of the justice system that everyone has a shared obligation to support.

“These costs, fees and assessments add up, and in the aggregate are a real barrier for low-income people to pay their debt, move forward, and put their mistakes behind them,” Zupanic said.

Bill sponsor Taylor Brown argues these fees in Montana are far lower than surrounding states. “We don’t hardly do anything, and maybe that’s fine when you’re a state that has very little crime, but that’s changing,” he said, referring to the oil boom in eastern Montana, and other factors like increasing gang and drug activity.

Ultimately, the bipartisan committee voted ten to two to table the bill.

Great Falls Democratic Senator Anders Blewett says everyone believes in crime prevention, but sponsors need to think of another way to fund it. Not surcharges.

Sponsor Taylor Brown says he did not want this fund to be drawn directly from taxpayers, but he will consider the idea for possibly drawing up a new bill to fund it through the State General Fund.

Revenue Estimate passes out of Senate Tax Committee

The Montana Senate Taxation Committee unanimously passed the bill containing the state’s revenue estimate on Friday. The estimate is used as a basis for state spending. Lawmakers from a joint House/Senate Committee have been meeting to discuss the estimate provided to lawmakers from the Legislative Fiscal Division.

The revenue estimate passed by the committee is a little more than $4 billion over the next two year budget cycle. The Senate Taxation Committee also unanimously amended the estimate $30 million higher during their Friday meeting, due to adjusted figures from the Legislative Fiscal Division.

Another amendment to add an additional $30 million to the estimate failed on a party line vote. This additional $30 million would have moved the figure closer to the higher estimate provided by the Governor’s Office of Budget and Program Planning, which uses a different method for predicting revenue.

Sen. Christine Kaufmann

Senator Christine Kaufmann (D-Helena) says the process of coming to the revenue estimate is a good one that resulted in a good starting place, but it could be better. She thinks economic factors studied by the Governor’s Office show revenues coming in stronger than what has been previously anticipated and she thinks that will keep happening throughout the session.

“We could have added a little bit more money to the estimate, and I think that would provide us a little more room for whatever we might need in terms of investing in public education and other services for Montana,” she said.

Sen. Ron Arthun

Republican members of the Taxation Committee say the revenue estimate could be off either way, positive or negative. Senator Ron Arthun (R-Wilsall) say the more conservative estimate will lead to less spending and “if the revenue comes in at a greater amount, there will just be more in the coffers for the next session.”

The revenue estimate now moves up to the full Senate for a vote next week. If passed, it moves over to the house.

Joint House/Senate committee considers revenue estimate

Sen. Dick Barrett (D-Missoula), left, and Sen. Fred Thomas (R-Stevensville) hear testimony on the state revenue estimate Thursday

Montana lawmakers are making their way through the process of passing a revenue estimate for the next two-year budget cycle. The revenue estimate is used as a basis for state spending.

Thursday, a joint committee of House and Senate members heard explanations of the estimate from the agency in charge of preparing it, the Legislative Fiscal Division (LFD).  The Governor’s Office of Budget and Program Planning (OBPP) also presented it’s revenue estimate figures to the committee.

The LFD and OBPP use different methods for calculating their revenue estimates, and have come to very different figures in years past, which has led to conflict over which revenue figures to use as a base for the budget. State Politics Reporter for Montana’s News Station Marnee Banks writes the revenue estimate, with its uncertainty has “historically been a political football with each party using it to its advantage.”

This year, however, the two estimates provided by the LFD and OBPP differ by only about one percent. That equals to about $62 million dollars out of about a $4 Billion dollar General fund budget over the next two years.

Senate Taxation Committee Vice-Chair Senator Fred Thomas (R-Stevensville) said he is optimistic the bill will move out of his committee in a timely fashion, either Friday of Monday. He says the process has been very thorough.

“We’ve reviewed how they’ve done the estimate, what the estimate is to this point in time…the process has been very uncontentious this time,” Thomas said. He expects the bill will pass the Senate next week and move to the House.

The revenue estimate never had a vote on the House floor during the 2011 Legislature, as House Speaker Mike Milburn kept it bottled up in the House Taxation Committee, looking to change the estimate. The same thing happened the two sessions before that.

House Taxation Committee Chair Mike Miller (R-Helmville) said new rules passed this year mean the revenue estimate must make it to the House floor for a vote.

Another voting bill draws heavy opposition, Sponsor says it’s misunderstood

Voter ID Bill Sponsor Rep. Ted Washburn (R-Bozeman) sits next to bill opponent Secretary of State Linda McCulloch (D-MT) during a Wednesday hearing of the House State Administration Committee

A bill requiring a Montana issued identification card in order to register to vote prompted a long line of opponents during its Wednesday hearing. One person did line up to speak in favor of the bill but was dismissed for not approaching during the time designated for bill proponents.

Representative Ted Washburn (R-Bozeman) is sponsoring several bills this session to modify the state’s voter registration process, including one which would eliminate Montana’s same-day voter registration system. He says he believes the current system is open to potential fraud, but that his voter ID bill (HB 108) does not confront those issues.

Washburn’s bill requires citizens present an ID issued by the Montana Motor Vehicle Division or a Montana Tribal ID card when registering to vote. If a Montanan doesn’t have a drivers license they can register for a standard Montana ID from MVD, which they can then use to register to vote. Washburn’s bill offers that ID card for free.

“Just because a person is poor or they don’t have a lot of money, they could still vote,” Washburn said, saying the bill could secure free identification for groups like senior citizens and young people.

Rep. Bryce Bennett (D-Missoula) speaking at a press conference against Rep. Washburn’s voter registration bills

“It’s political spin to say this is about making voting easier for people,” said Representative Bryce Bennett (D-Missoula) at a Wednesday press conference against the bill. Bennett says adding a new requirement, even if it is free, doesn’t make the system any easier. Bennett says Washburn is trying to limit the voting rights of certain groups. Great Falls cattle rancher Richard Liebert said of the current system, “if it ain’t broke, don’t fix it.”

Some of the opponents of the bill represented the groups Washburn said would be helped by it, such as the AARP. Native American groups and disabled persons also spoke against it as trying to find a solution in search of a problem. They pointed out Montana has no documented incidence of fraud.

Rep. Washburn said some of these groups, although making sure not to point out any specifically, have their own agenda who may not actually have a problem with the legislation, but rather because “they oppose anything.” He said they don’t understand the intent of HB 108.

Washburn said he has one more voting process bill the House State Administration Committee will be hearing soon, does address the fraud potential he sees in Montana’s election process.

Unborn child protection bill prompts early Session emotion

Representative Keith Regier (R-Kalispell) presents his bill to create a criminal offense involving the death of an unborn child to the House Judiciary Committee Tuesday

The passionate emotions tied up within one of the nation’s most divisive social issues briefly rose to the surface during a Tuesday morning meeting of the House Judiciary Committee.

It was during the hearing of a bill the sponsor says is not supposed to be about abortion, rather the safety of unborn children from ‘wanted pregnancies.’ Yet the testimony spent a good deal of time talking about the former.

“The focus lies entirely with inserting abortion rhetoric into the state criminal code,” said Kim Leighton of NARAL Pro-Choice Montana regarding House Bill 104.

Bill sponsor Representative Keith Regier (R-Kalispell) says his bill does not stray into the abortion issue, specifically allowing exceptions such as, “emergency medical care” and “lawful medical procedures…with the consent of the pregnant woman.”

“This bill could be called the pregnant woman protection act,” Regier said, noting that under Montana law when a pregnant woman is killed, it is officially only considered one death.

Proponents said 36 other states have similar laws, many of which have been challenged  up to the US Supreme Court, which has not found them in conflict with key pro-choice decisions such as Roe v. Wade.

The discussion on the bill was civil, with the emotion mentioned at the top of this post coming near the end of the committee’s questions of those who had provided comment.

Lynsey Bourke from Missoula’s Blue Mountain Clinic (a health facility that does provide abortion services) testified the bill infringes on Montana’s right to privacy.

First-term Representative Clayton Fiscus (R-Billings) repeatedly asked Bourke if she thought the other states that passed similar legislation were wrong to do so, and in a final follow-up asked “You’re saying this is wrong, conceptually, but there’s no factual evidence this is wrong?”

His question was objected to as ‘badgering the witness.’ Committee Chair Krayton Kerns (R-Laurel) upheld the objection.

“Let’s try to keep our questions to information gathering for this committee,” Kerns said. “The opinions of people out in the public will be different than ours. We can’t always confront everybody about it.”

No action was taken on the bill.

Steve Bullock sworn-in as Montana’s 24th Governor

courtesy Jackie Yamanaka

Montana has a new Governor.

Democrat Steve Bullock was sworn into the state’s top job Monday, succeeding Governor Brian Schweitzer.

Bullock is setting a tone of cooperation at the beginning of his term.

“We’ll continue to grow our economy, foster 21^st Century Industries and create jobs that didn’t even exist when we were children,” Montana’s new Governor, Steve Bullock, said Monday morning.

Onlookers gathered on the cold Helena morning to watch the transfer of power. The inauguration of a new governor, on the north steps of the state capitol building.

It was a ceremony beginning and ending with the voices of children, elementary students from Helena’s Central School.

Outgoing Governor Brian Schweitzer took the podium in a long green trench coat  to congratulate Steve Bullock and his family.

“I…know that Steve Bullock, Governor Steve Bullock knows that the government’s for the last and the least. The first and the most, you’ll make your own way,” he said.

Seven Statewide elected officials took the oath of office administered by Montana Supreme Court Chief Justice Mike McGrath: Supreme Court Justice Brian Morris, Attorney General Tim Fox, Superintendent of Public Instruction Denise Juneau,  State Auditor Monica Lindeen, Secretary of State Linda McCulloch, Lieutenant Governor John Walsh, and Governor Steve Bullock.

“It’s extremely humbling to stand before you as the 24^th Governor of the state of Montana,” Bullock said, adding his cabinet and staff have been granted an incredible opportunity by the voters,“the opportunity to make our state an even better place to live, an even better place to work to build a business, an even better place to raise a family.”

Bullock says he’s excited to work with a group of lawmakers as diverse as the landscape of Montana.

“To the members of the 63^rd Legislature, welcome,” Bullock said.

He asked the Legislature to work not necessarily for the good of their party, but for the voters.

“They won’t measure our success by political points scored or zingers flung out on the front page of the newspaper,” he said. “I look forward to working with each and every one of you.”

And with that a man who grew up just a few blocks away from the Capitol building began his new job.

Governor-elect Bullock releases state budget proposal

Governor-elect Steve Bullock announces his proposed budget Friday

Governor Elect Steve Bullock has released his proposed state budget on the eve of the start of the Montana Legislature and his inauguration on Monday. The proposal makes modifications to the final budget submitted by outgoing Governor Brian Schweitzer, including what staff say is about $30 million dollars more in spending.

“Just like budgets that we come up with around the kitchen table, a state’s budget is truly a reflection of the values and the priorities of the people of Montana,” Governor-elect Steve Bullock said Friday after walking into the expansive rotunda of the Capitol Building, flanked by top-staffers handing out thin orange books.

The books contain highlights of the administration’s budget for the next two-year budget cycle. It will serve as a starting point for the State Legislature.

“Healthier Montanans will contribute to a healthy Montana economy,” Bullock said, announcing for the first time through the budget that he will support the optional Medicaid Expansion provision in the federal Affordable Care Act. “To prevent those cost shifts, to insure Montanans, to reduce losses to healthcare providers and to utilize federal funds which without Legislative Action will simply revert to other states.”

Medicaid Expansion is part of a wider initiative Bullock calls Access Health Montana. It also includes a proposal to expand opportunities for medical students and a two percent rate increase to healthcare providers.

The Bullock budget includes more education spending than Governor Schweitzer’s budget while keeping in Schweitzer’s tuition freeze at state colleges and Universities.

“We’ve proposed to fix the pension system,” Bullock said. The state’s two biggest employee retirement programs have large budget shortfalls, amounting to about $3 billion dollars over the next 30 years. Fixing the pensions has long been labeled a top priority for this upcoming Legislative Session. Governor-Elect Bullock’s pension fix proposal closely follows that of Governor Brian Schweitzer.

It calls for higher contributions from public employees, their employers, and an infusion of revenue from natural resource development. Local governments have been skeptical of the proposal, saying it could lead to a forced increase e in property taxes. But Bullock says since election day he has earned their favor.

“I’m happy to announce the Montana Association of Counties and the Montana League of Cities and Towns will join my administration… in putting forward a solution to the public employee retirement system that I think we can all support,” Bullock said.

Republican Speaker of the House Mark Blasdel is not ready to go that far.

“I think it’s a step in the process,” he said. Blasdel and lawmakers received the proposed budget at the same time as the press this morning.

“I’ve just briefly gotten to look at it, we welcome the Governor’s ideas,” Blasdel said.

He stopped short of outright endorsing or opposing priorities in the budget. Yet, he says Republicans support a form of permanent property tax relief rather than the one-time $400 dollar property tax refund present in the Bullock budget.

“If you look over the last few bienniums there’s been a surplus in most of them which means the taxpayers have over-performed,” Blasdel said.

Republican leadership has also been cold to the idea of Medicaid Expansion, not wanting to rely on the large financial support provided from the federal government. But leaders say they are still optimistic they will find common ground.

Blasdel says he needs to be a little vague in responding to the budget, considering the amount of discussion yet to come.

“Well absolutely,” he said. “I think every session takes on a life of its own. What may be the major issues at the beginning don’t always end up being the final issues at the end.”

Blasdel says he hopes this Legislative Session, and the Republican caucus remains focused.

“Focus on bills that you think the Governor can sign, work with people that you may have not worked with in the past, to see if there’s some kind of compromise without compromising your values as well,” he said.

That search for compromise begins Monday, when the 63^rd Montana Legislature convenes.

Montana lawmakers cite term limits a top reason for decline in legislative statesmanship

State lawmakers convene in less than two weeks for the 2013 Montana Legislature.

Political leaders are touting what they hope will be a productive session, one perhaps more civil than the rancorous 2011 Legislature.

At this point, however, those hopes are still just that.

It’s been a long time since Republican Verner Bertelsen served in the Montana Legislature.

Well, about 30 years.

The 94 year-old former Secretary of State felt lawmakers in his day had more freedom to act outside party dogma.

“We had the opportunity to act as individuals and not as puppets on a string,” Bertelsen said.

Bertelsen was known for being very moderate and voting with Democrats regularly. He did eventually lose his seat in the Legislature after losing his primary to a more Conservative Republican in the 1980s. Still, Bertelsen doesn’t like the tone he’s been seeing from modern legislatures, and the first reason he cites is the implementation of term limits in the early 90s.

“And I didn’t really see that to begin with,” he said. “I thought maybe some of those old boys who have been there 25 or 30 years need to take a vacation. But I didn’t realize doing away with all of this knowledge about how to operate a legislature and how to be able to negotiate across the lines made a terrific difference in what you can accomplish.”

Legislative term limits were put in place by Montana voters in 92. That constitutional initiative was passed by a large majority, and term limits still enjoy wide public support. Lawmakers cannot run for an office if they have held that position for any 8 years in a 16 year period.

Senate Minority Leader from the 2011 Legislature, Missoula Democrat Carol Williams is reaching the end of her term limit at the end of this year.

She wasn’t able to think of any positives from the implementation of term limits.

“With term limits the really serious power all moved to the executive branch or to the lobbyists,” she said, adding the part-time legislators cannot stay around long enough to gain that kind of clout.

Williams also believes the rise of the Tea Party has made the state legislature more prone to bickering.

She says Tea Party lawmakers didn’t seem to want to make government work in 2011.

“Consequently, you can’t fix anything because that isn’t what their intention is, their intention is to make it go away,” Williams said.

“Obviously the atmosphere in Helena could have been better,” Incoming Senate President, Billings Republican Jeff Essmann said of the 2011 Legislature. “We’re obviously looking forward to working with the new governor, establishing a new tone and getting down to work.”

“What can you do to promote a greater tone of civility in the issues that will be heated and divisive?” I asked.

ESSMANN: “I think number one the focus needs to be on policies and not personalities…There’s been a trend within our society to try to demonize people with whom we disagree and I’ve always tried to avoid that in my work in the legislature,” he said.

But Essmann also says term limits have reduced the strength of leadership in the Legislature.

Spokesman for Governor Elect Steve Bullock Kevin O’Brien says Governor Bullock will be a partner to anyone who wants to create jobs, but if “spear hunting and gold standard bills” reach Bullock’s desk, he says they will be rejected.

Health professionals tell lawmakers about priorities

A collection of healthcare professionals in Helena are outlining priorities for state lawmakers.

The group met over breakfast Tuesday.

Proposed Medicaid Expansion will likely dominate the Legislative session beginning in January.

The attendees of this early morning breakfast chose from large pans of scrambled eggs, tater tots and bacon. Sitting in a large conference room in St. Peters Hospital, they talked healthcare.

The hospital sponsored the event along with the County Health Department, and other health organizations like tobacco use prevention groups.

They took turns speaking to two Democratic lawmakers; another Democrat and Republican weren’t able to make it.

When the mic comes around to Helena Democratic Senator Christine Kaufmann, she makes clear her focus for the legislature.

“The biggest impact of anything we do this session is to cover uninsured people,” she said, referring to the decision the legislature will make on whether or not to expand Medicaid coverage.

Medicaid Expansion is a provision of the Federal Affordable Care Act. An upfront payment of $5 million by the state would trigger federal funds to cover about 80 thousand new Medicaid patients in Montana.

Democratic Lawmakers are expressing support but many Republicans are not on board yet. Some GOP legislators have characterized Medicaid Expansion as an unreliable and expensive overreach of the federal government.

It’s a divisive discussion, and Helena Democratic Representative Jenny Eck believes it will be at the forefront of the legislative health debate.

“It’s a big choice we have to make as a state and it’s not a choice we can ignore,” Eck said, “But I do think we have to remember there’s a lot of ways to address our healthcare crisis.”

And that’s where most of the attendees at the breakfast came in, not talking about Medicaid expansion but a whole host of other things. Mental Health Services, the Childrens Health Insurance Program, and so on. A lot of the discussion revolved around wellness, which is what St. Pete’s Radiologist Dr. Jeff Georgia was talking about. He started by walking over to the breakfast pans.

“Turns out the cafeteria food is fat laden,” he said, “we’ve got bacon and eggs and tater tots.”

There is also a bowl of fruit, but Dr. Georgia says he’d like to see the healthy food dominate a breakfast like this. He says every dollar invested into programs promoting wellness and preventive care saves around seven dollars in healthcare costs for patients later.

“The problem in the Legislature tends to be that the things that are the most dramatic get the most funding and sick people with coronary artery disease, that’s a dramatic presentation,” Georgia said.

Lewis and Clark County Health Officer Melanie Reynolds agrees.

“You know, that is always a challenge for the public health community, for us to talk about something that will have benefits way down into the future,” Reynolds said.

But she says those types of bills will still be a priority.

“We’re looking at legislation that makes the healthy choice the easier choice for citizens,” Reynolds said.

A priority that will have to likely stand in the shadow of Medicaid Expansion.

–