Senate suspends rules to pass OPEB fix - Business, Government Legal News from throughout WV

Senate suspends rules to pass OPEB fix

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The Legislature has plans to again act quickly on a big issue for the state.

Members of the Senate suspended the constitutional rules Wednesday that require a bill be read on three separate days to pass Senate Bill 469, Gov. Earl Ray Tomblin's plan to pay down the state's retirement plan debt. West Virginia is on track to become the first state in the country to come up with a plan to pay down its debt.

The massive unfunded liability, Other Post Employment Benefits, or OPEB, is the part of the state's budget that funds retired public employees' health care benefits. The Legislature has been trying to deal with the unfunded liability for about four years. The state doesn't have to pay the entire liability right now, but it had struggled to show that it can manage the unfunded liability.

At a Dec. 13 meeting, the PEIA board passed a measure to cap the amount the state contributes to the OPEB liability. The state currently provides a $343 subsidy toward premiums for each retiree, and the board voted to keep those subsidies the same with just a 3 percent annual increase to account for medical inflation.

The PEIA finance board cut the debt from $10 billion to $5 billion, but many state leaders wanted to take that a step further.

"It would be safe to say we are the first state that's handled this in a comprehensive nature with a large unfunded liability," Sen. Robert Plymale, D-Wayne, said during the Senate session.

The plan takes $35 million each year in personal income tax collections to pay off the debt. Those funds are currently set aside to pay down some long-term debt in the former state-controlled workers' compensation program that should be paid off by 2016.

The bill also calls for $30 million each year to go into a fund to pay down the leftover $5 billion of long-term OPEB debt.

And $5 million each year would go into a trust fund for employees hired after July 1, 2010. Those employees are not eligible for state-subsidized retiree health care coverage.

The measure will go to the House for its consideration.

Senate President Jeff Kessler, D-Marshall, said he understood the House would move quickly on the bill as well.

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