House passes plan to preserve state employee pensions

Representative Keith Regier (R-Kalispell)

Representative Keith Regier (R-Kalispell)

The House of Representatives has decided to move forward with a plan to fix the state’s ailing pension systems, a plan brought forward by Governor Steve Bullock.

As we’ve reported, the  state’s biggest retirement systems are on pace to be more than $4 billion in debt over the next 30 years if their funding mechanism isn’t changed.

The Governor’s plan is split into two bills which separately address the state’s two largest systems, the Teachers Retirement System (TRS) and Public Employees Retirement System (PERS). Those plans require both employers and employees put in more money toward the pensions. They would also take more money from state trust lands. The House approved both by wide margins Thursday, 60-39 for the TRS plan and 64-35 for the PERS plan.

“I think most citizens of Montana are gonna see that we’re just trying to bail out a failed plan,” said Representative Keith Regier (R-Kalispell). He sponsored another bill which became the top alternative to the Governor’s plan. It would have moved all new hires over to defined contribution plans, which are similar to 401(K) plans used often in the private sector. Making that shift would have cost the state more money, but Regier argues only for the short term. Under his plan, the state could eventually transition out of the pension program. The state would contribute money to the defined contribution plans of the employees, but the stability of those plans would be based on the whims of the stock market.
“It comes down to who should have the risk for somebody’s retirement,” he said, meaning the individual employees with the defined contribution plans or the state with the current pension system.
Representative Tom Woods (D-Bozeman)

Representative Tom Woods (D-Bozeman)

Representative Tom Woods (D-Bozeman) sponsored the Governor’s plan to fix the Teachers Retirement System. He says House members realized it was the best way to move forward, “that it’s more expensive to close defined benefit plans than to fix them.” He believes the two bills have cleared their biggest hurdles as they move over to the Senate.

“I believe these bills will pass,” said Eric Feaver, President of the state’s largest public employee union, the MEA-MFT. “This is the session to do it, we have the money to do it, we have the commitment.” Feaver is a strong supporter of the pension fix bills even though he believes parts of the measures are unconstitutional. While the Governor’s pension bills were in a joint-select committee responsible for pensions, lawmakers added amendments which would lower the guaranteed cost-of-living adjustment built into the plans of current employees. Legislative legal staff have warned this could be a breach of contract.
“That’s a problem,” Feaver said. He says he will lobby to try to remove those amendments in the Senate or if the bill makes it to Governor Bullock’s desk. If they make it all the way through the process, he believes he and several other plaintiffs could mount a successful lawsuit to strip them.
“The bills need to pass anyway,” he said.
Lawmakers in favor of the 401(K) retirement plan shift are not giving up. On Wednesday, Senator Dee Brown introduced a bill which, if passed, would put the proposal before the voters.
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Budget, retirement, friendship and getting hosed – all on Capitol Talk

Johnson, Mauk & DennisonSMALLOn this edition of “Capitol Talk”, our weekly legislative analysis program, News Director Sally Mauk talks with Lee newspaper reporters Chuck Johnson and Mike Dennison about the House’s unusual unanimous passage of the state budget, the fate of Medicaid expansion, the competing plans to bail out state pensions, and the rift between two long time political allies, over remarks about the conduct of some University of Montana football players…

Blast from the Past: Why House members are dressing in 1913-period clothing

Reps. Ed Greef (R-Florence) and Ray Shaw (R-Sheridan) converse before House session commemorating 100th birthday of the state House Chambers

Reps. Ed Greef (R-Florence) and Ray Shaw (R-Sheridan) chat before House session commemorating 100th birthday of the state House Chamber

No, the center aisle of the Montana House of Representatives is not normally lined with spittoons–just today, in an homage to the past.

The likes of spittoons, top hats and ascots were common place 100 years ago, when the current House Chamber was first used. To celebrate, House members are trying to bring it all back. The chamber itself has been re-decorated, House members and staff are dressed in period clothing, and today’s floor session even features mock debate on bills from the 1913 session.

“This occasion only comes around every 100 years,” House Speaker Mark Blasdel (R-Somers) said in a press release. The Legislature has just returned from its transmittal break and Blasdel says the schedule was light enough to swing this re-enactment.

Business continues as usual for House Page Logan Schuelke

Business continues as usual for House Page Logan Schuelke

“We would only have had 8 bills on the floor today and none tomorrow,” Blasdel said. “So we rescheduled all the bills for tomorrow. There’s no other day on the calendar when we would have been able to take the time.”

Representative Tom Woods (D-Bozeman) was working on his Macbook Pro decked out in a bowler hat, spats, and a vest he wore in his wedding. He says it’s important to recognize the past, and to further urge togetherness among lawmakers: “(This) has started out to be a very good session in terms of relations between parties on both sides of the aisle. I think (this activity) is probably promoting that camaraderie, that civility.”

The 1913 bills being ‘discussed’ today on the House floor:

  • HB 94: Defining the Crime of Seduction and fixing the penalty therefore 
  • HB 64: Defining the term Communicable Disease
  • HB 156: Regulate the sale of intoxicating liquor
Rep. Kristin Hansen (R-Havre) wears the demure expression of the times

Rep. Kristin Hansen (R-Havre) wears the demure expression of the times