Vermont governor focuses on state pension fund bill during weekly briefing

The Vermont Legislature is considering changes to the state pension fund to stabilize unfunded liabilities while guaranteeing retirement benefits to state employees. It was one of the main focuses of Governor Phil Scott’s weekly briefing on Tuesday.

Vermont Senate Bill 286 seeks to restructure and help close nearly $5.8 billion in unfunded liabilities in the state pension fund.

Pro Tem Democratic Sen. Becca Balint, speaking in WAMC’s Congressional Corner this week as part of her campaign for Congress, was optimistic that the legislature and administration will come to an agreement on the proposal.

“We’re days away from getting this work through the House as well and hopefully getting the governor’s signature,” Balint said. . But if he does, we’ll be ready.

Republican Phil Scott said Tuesday that in his five years as governor, the state has spent more on its retirement obligations than the previous 20 years combined. He added that real structural reform is needed, but the administration’s recommendations were not included in the bill.

“This bill, while taking positive steps, doesn’t go far enough,” Scott said. “He’s just kicking the box. I’m afraid we’re putting a band-aid of over $200 million on this without addressing the underlying issues. Remember the $200 million is on top of that. to the payment of about $400 million that we included in the budget. By the way, five years ago when I first became governor, that payment was just over $200 million of dollars, so in five years it has doubled.

Governor Scott tapped retired KPMG managing partner David Coates, a member of the 2010 Commission on the Design and Funding of Retiree Pension and Health Benefits Plans for State Employees and teachers, to explain the administration’s plan to revamp the pension fund.

“I think it’s important that we understand what the scope of this is,” Coates said. “When you round up its $5.8 billion. Now the unfunded liabilities: that’s the long-term debt. When you look at the $5.8 billion on the state balance sheet, that’s the most important thing there,” Coates said. “So S.286 the pension bill, what does it accomplish? of people talking about deducting $2 billion from our unfunded liabilities. Well, when you break that down, only $300 million of that is against our pensions. And that’s not really in context.

Regarding the overall $8 billion state budget proposal for 2023, Governor Scott says major differences remain between the Legislature’s version and his January proposal.

“While I appreciate that both the House and Senate fund many common priorities, they have also proposed and focused on government systems,” the governor said. “While the Senate version, again, is an improvement and has moved in the right direction, it fails to take advantage of the unprecedented opportunity before us. Fortunately, there is still time to come together to ensuring that we prioritize long-term growth over short-term fixes with one-time money.

Dolores W. Simon