Governor’s pension fix and 401K proposal both move forward

Pension Joint Select Committee Chair Dave Lewis (R-Helena), right, and committee member Rob Cook (R-Conrad)

Pension Joint Select Committee Chair Dave Lewis (R-Helena), right, and committee member Rob Cook (R-Conrad)

The Joint-Select Committee on Pensions has had a tough job the last few months– wading through the complex budget shortfall facing the state’s largest retirement systems. Over the next 30 years, those funds will end up more than $4 billion in debt if nothing is done.

When the committee first started meeting, it was mentioned that the committee would try to put forth one, encompassing bill to fix the pensions, combining what they liked from the 18 different bills presented to them. But as discussions moved forward, it became clear the group of eight Republicans and four Democrats were considering two main, and opposing, ideas.

  • Governor Steve Bullock’s proposal: This plan, modified from a plan put forth by former Governor Brian Schweitzer, would keep the current ‘defined benefit’ retirement systems in place for future employees. It would attempt to fix the plans by requiring employees put more of their money into the retirement systems, requiring employers put in more money, and then pulling some money in from state trust lands. The Governor’s plan is being carried by Representative Bill McChesney (D-Miles City). It’s HB454
  • A ‘Defined Contribution’ model: This moves all future employees to ‘defined contribution’ plans, which are similar to 401(k) retirement plans used widely in the private sector. The idea has largely been spearheaded by Committee Chair Senator Dave Lewis (R-Helena) who says the current model is unsustainable in the long-term. Lewis’s ideas were modified into HB338 carried by Representative Keith Regier (R-Kalispell). This proposal would pay for current pension funds from other sources.

Ultimately, the joint-select committee decided to pass both ideas on to the House Appropriations Committee. Chair Lewis says he has received criticism for not settling on one bill, but he says the two main ideas are in too stark opposition to combine.

“You can’t meld those,” he said. “These are policy choices the Legislature’s going to have to make.”

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

Members of the Legislative Joint Subcommittee on Pensions meets in the Capitol Tuesday

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.

GOP Leaders react to emails indicating division in party, encourage unity

Senate President Jeff Essman (R-Billings), center,  speaks with the Senate GOP Caucus Thursday

Senate President Jeff Essman (R-Billings), center, speaks with the Senate GOP Caucus Thursday

Republican leaders in the Montana Senate are reacting to a series of emails showing a sharp divide between the moderate and conservative factions of their party.

 The private emails obtained by the Great Falls Tribune speak of a long-term strategy of Senate President Jeff Essman (R-Billings) to create an atmosphere leading to a more conservative Legislature and a more conservative Montana Supreme Court. In the emails, Essman suggested moderate Republicans could ‘derail the conservative agenda.’ He said moderates were in a position to block such an agenda if they decide to align with Democrats.

But on Thursday afternoon, Essman tried to alleviate sore feelings about the emails during a Senate Republican Caucus meeting. He said he’s always been consistent about his agenda to create a ‘conservative, balanced budget.’ He assured the group he was elected Senate President to serve the whole body, Republicans and Democrats.

“My responsibility to them is to make sure their bills get a fair hearing and that the rights of the minority are respected,” he said.

Essman defeated 2011 Senate President Jim Peterson (R-Buffalo)a, who did run for re-election. Peterson is seen as more moderate by comparison, and was referred to several times in the emails among Essman, Senate Majority Leader Art Wittich, Majority Whip Eric Moore and Senators Jason Priest, Ed Walker and Dave Lewis.

The emails speak about not being able to trust Peterson not to work with Democrats, calling him a chump. Peterson said he finds the emails unbelievable, saying current leadership seems to be making no room for those he calls ‘Reagan Republicans.’

“You know, Reagan prided himself on being able to hear both sides of a conversation and finding a solution. And here that’s getting tougher to do…without feeling your future being jeopardized,” Peterson said.

Senate Majority Leader Art Wittich (R-Bozeman) doesn’t shy away from saying he was strategizing for a way to promote his world view in the emails.

“It’s not just conservatism, I think there are other things that we were concerned about,” he said. “Frankly, we wanted strategic thought, we wanted competence in our leadership.”

He said the ideological debate going on within the GOP is a discussion happening across the country and that the emails don’t change the intentions of his party to work across the aisle and within their own aisle to find common ground.

BOTH SIDES: I-166, establishing a state policy that corporations are not people

This week we’ve been looking at the ballot measures up for voter approval this November. We now move to Initiative 166, a law establishing a statewide policy saying corporations are not people. The initiative attempts to respond to a string of court decisions gutting Montana’s campaign spending laws.

The 9th U.S. Circuit Court of Appeals has reinstated a campaign contribution law struck down by District Judge Charles Lovell last week. The court granted the emergency stay requested by the state Attorney General’s office, saying Judge Lovell did not provide enough information to justify throwing out state donation limits. Lovell has responded with a 38-page document supporting his originally terse decision. The 9th circuit has yet to answer that.

Earlier this year, Lovell struck laws requiring attack ads to disclose voting records as well as a ban on knowingly false statements in those ads. A federal appeals court overturned the state’s ban on partisan endorsements of judicial candidates. And this summer the U.S. Supreme Court threw out Montana’s century old Corrupt Practices act, which banned corporate spending in elections.

The catalyst behind all these decisions has been the Supreme Court’s 2010 Citizens United decision, one of the court’s most controversial of the last decade. That ruling allows corporations or unions to spend unlimited amounts of money on advertisements directly in favor of or against political candidates. Before the ruling, individuals within that corporation would have to spend their own money—and the amount was limited.

“We’ve had a fair system of elections. We’ve benefited from that. Now the Supreme Court is saying ‘no, you have to have corruption,” said CB Pearson, the campaign treasurer for  the committee supporting I-166, Stand With Montanans.

Here’s how the ballot starts:

“Initiative 166 establishes a state policy that corporations are not entitled to constitutional rights because they are not human beings, and charges Montana elected and appointed officials, state and federal, to implement that policy.”

At first, it sounds pretty broad, the full ballot language focuses more directly on corporate campaign contributions.

(SEE FULL I-166 LANGUAGE HERE)

Basically, it’s calling on state leaders to do whatever they can to reverse or work around Citizens United.

Pearson says large multi-national businesses should not be able to spend at will from their corporate treasuries to influence elections.

“That means just as they buy cars or nails…they just want to buy politics for an end result and that end result is profit and it may not have the people of Montana’s best interests at heart,” Pearson said.

However, the decision has no legally binding way to prevent corporate political spending, because of Citizens United. It would more or less be a statement from the people. Proponents still think it’s an important statement to make, like 94 year old former Republican Secretary of State, Verner Bertelsen.

“This becomes a tremendously big national issue not only in Montana but all the states of the union,” Bertelsen said.

Bertelsen thinks a movement to reverse Citizens United could start in a rural state, spreading across the country—eventually to the halls of congress.

“The end point is a constitutional amendment,” he said.

Republican State Senator Dave Lewis opposes the Initiative.

“If the people of Montana vote for this, nothing is going to happen,” he said, because to pass a constitutional amendment, “it takes two thirds of the members of congress and three quarters of the states to approve it and I do not see that as even possible…It seems like such a waste of time and effort to put it on the ballot and ask people to vote for it.”

And then there are those who oppose I-166 because they want Citizens United in place, like Montana Shooting sports association president Gary Marbut. His association is a nonprofit corporation that pursues and promotes pro-gun policies. And Marbut says Citizens United gives his organization the opportunity to be a political player in a way it never has been.

“We’re not Exxon, we’re not Citibank, we’re a nonprofit corporation of like-minded individuals joined together in a common purpose,” Marbut said.

He says his nonprofit should be able to spend money to try to affect policy. He says that’s why it exists, why the members pay dues.

The conservative group American Tradition Partnership has been behind several of the lawsuits against Montana’s campaign laws. The group has been arguing spending money on ads, even false ones, falls under freedom of speech guaranteed in the first amendment. Meanwhile, the State Attorney General’s office is seeking sanctions against American tradition, calling it a shadowy front group illegally trying to conceal its political spending.

District Judge Charles Lovell says much has been made of whether striking Montana’s contribution limit is good policy and good for Montana. But he says the case is not about good policy, he says it’s about following the law set out by the U.S. Supreme Court in Citizens United.

With I-166, Montana voters will say whether or not they feel the nation’s highest court was wise in setting that law.

This story uses excerpts from my Montana PBS special on the ballot measures, “From the People: Montana’s 2012 Ballot Measures”

–The Associated Press contributed to this report.

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BOTH SIDES: LR 122, prohibiting the government from mandating the purchase of health insurance

BOTH SIDES: LR 121, denying certain state services to illegal aliens

BOTH SIDES: LR 120, requiring parental notification prior to abortion for a minor

BOTH SIDES: LR 120, requiring parental notification prior to abortion for a minor

Montana voters will be deciding on five ballot measures during this November election.

We will be reporting on each of them over the next few weeks, starting with the three measures put up by the 2011 Legislature—the legislative referenda.

Putting a legislative referendum on the ballot—it’s a strategy, a tool at the disposal of state lawmakers. The legislature can take a bill working its way through the traditional bill process and put it on a different track—making it a referendum with a simple majority.

Why would legislators want to do that, remove their own power to decide on a bill and give it to the people?

Well, by doing so you bypass the executive branch.

“Oh absolutely,” said Helena Republican State Senator Dave Lewis of this year’s measures, “I mean none of those would have been acceptable to the governor.”

Democratic Governor Brian Schweitzer set a state record of 78 vetoes in 2011. Schweitzer made national headlines for setting these bills aflame with a red hot veto branding iron. The Republican dominated House and Senate chose 5 bills to escape that iron—to become legislative referenda.

Republicans hope the bills will have a better chance of becoming law this way.

The Montana Supreme Court tossed out two of them—leaving three. The first one, LR 120 would require parental notification prior to abortion for a minor under the age of 16.

(SEE FULL LR 120 LANGUAGE HERE)

“It’s a difficult subject to even approach here in the Legislature,” said Republican Speaker of the State House of Representatives Mike Milburn. “There’s probably nothing that causes more emotion than talking about abortion.”

That’s why Milburn points out this measure does not directly take on the ethics of abortion. He says it’s about responsibility.

“You can’t give an aspirin in school without calling up the parent and saying can we give this person an aspirin. You can’t go get your ears pierced as a minor without calling up the parents. But yet you can go get an abortion,” he said.

Milburn calls this a compromise ensuring parents are involved in what is often a very emotionally difficult decision. A physician would need to notify the parent or legal guardian at least 48 hours prior to the procedure. This requirement would be dropped if there’s a medical emergency, if it’s waived by a youth court or if it’s waived by the parents themselves. Milburn notes the measure does not go so far as to require parental consent for an abortion—just notification.

“I don’t think there’s a distinction at all,” said Executive Director of the nonprofit NARAL Pro-Choice Montana, Julianna Crowley. She says either way, consent or notification, the parent is still being told, and that can be precisely the problem.

“Not all young people come from healthy families and it’s not the government’s role to mandate healthy family communication where it does not exist,” Crowley said.

Crowley says the vast majority of young girls do consult with their parents before considering abortion. Those that do not, she says, may be hiding it from their parents for their own safety. She wants that preserved and she does not fully buy Milburn’s argument that this is not about the wider abortion issue.

“It is one way that anti-choice politicians are chipping away at reproductive rights and the right to privacy as instilled in the Montana Constitution,” Crowley said.

Under LR 120, someone who performs an abortion without giving prior notification is subject to a $500 dollar fine and or 6 months in jail.

The measure would also add a legal penalty for anyone who coerces a minor to have an abortion—a one thousand dollar fine and or one year in jail.

This story uses excerpts from my Montana PBS special on the ballot measures, “From the People: Montana’s 2012 Ballot Measures”