W.Va. municipal pension relief plan wins passage

AP News
Posted: Nov 20, 2009 8:59 AM

Some of West Virginia's largest cities can soon freeze and gradually pay down their daunting pension funding shortfalls, after the House of Delegates sent Gov. Joe Manchin his special session relief proposal Thursday.

The bill was the governor's chief reason for summoning the Legislature just months before its regular, 60-day session.

Lawmakers also passed six of the other 11 bills from the governor's agenda. One could allow counties to issue up to $225 million in stimulus-related development bonds. Another permits a pilot program to ensure a complete and accurate count of military and overseas absentee ballots.

A pair of funding measures would distribute a total of $28 million in state, stimulus and other federal money. Beneficiaries include Medicaid dental coverage, in-home care for seniors, the Division of Forestry and the Department of Military Affairs and Public Safety.

Thursday's bills also included a measure making clear that relevant records kept by the governor, Legislature or the secretary of state are not destroyed when a pardon prompts a court order expunging the files in a criminal case. Lawmakers also tweaked laws governing the state's retirement board to keep its pension funds in sync with federal tax law.

The House and Senate return Friday for votes on the remaining bills. House Republicans had blocked attempts at an early vote on Manchin's proposal to limit future changes to part of the state gas tax.

That part reflects average wholesale fuel prices, and changes annually. For that calculation, the bill would set a floor price of $2.34 per gallon and after 2010 limit changes to within 10 percent.

But Manchin's bill would also make permanent a nickel-a-gallon hike to the tax, adopted as a temporary measure in 1993 and repeatedly extended. House Minority Leader Tim Armstead, R-Kanawha, tried to amend the bill so that the increase would expire in August 2013 as scheduled.

The attempt failed 30-66. Delegate Tom Louisos, D-Kanawha, joined the chamber's 29 Republicans in that vote. House Finance Chairman Harry Keith White, D-Mingo, said the nickel-per-gallon supplies around $60 million to the State Road Fund annually.

Delegate Jonathan Miller, R-Berkeley, sought to repeal the wholesale-based component of the tax entirely. The House rejected that on a voice vote, after White explained it supplies $167 million to the state's main highway fund. Accounting for around 44 percent of total gas tax revenue, White said that money also helps draw down matching federal dollars.

Miller also voted against the pension fund bill, as did GOP Delegates Daryl Cowles of Morgan County and Pat McGeehan of Hancock County. Under the measure, municipalities can elect to close their police and fire plans. That step would allow them to pay off their funding shortfalls gradually, with fixed payments spread over 40 years. It creates a state-managed pension plan for new police and fire department hires in those communities.

The bill is dubbed the "Huntington Plan." The state's second-largest city has warned it faces insolvency if not helped with unfunded liabilities in its plans, last calculated at $125 million.

Charleston, the state's largest city and its capital, is also among cities eyeing the legislation, said Executive Director Lisa Dooley of West Virginia's Municipal League. A 2007 survey of 47 police and fire programs found that they were, on average, 40-percent funded. Only four were at 75 percent or better.

"We're just thrilled that after many years of stakeholders' meeting and getting together at the table and pounding our fists, we have finally have something that we think will work with," Dooley said Thursday.

Previous bills had failed, largely because they earmarked state revenues toward the municipal shortfalls. Rural delegates opposed that step, as did supporters of the state's Volunteer Fire Departments.

"Everybody gave a bit, and there were times when we hit a barrier, but we were always able to work around it," said Senate Pensions Chairman Dan Foster, D-Kanawha and a chief negotiator of the bill.