15 May 2006

Committee action, May 15: SB 528

SB 526 by Sen. Walter Boasso would attempt to prevent actions made by government that would increase the estimated $12 billion in unfunded accrued liabilities. Amendments actually to pay it down by requiring a greater portion of investment gains to go to paying it down if the Legislature kicks in some money as well were adopted. It had to make a stop in the Senate Finance Committee because of the large fiscal note attached. Boasso wants the Legislature to kick in about $110 million starting this year to pay it down, which he said not only would reduce liability by almost $2 billion, but also had a provision that would allow for cost-of-living-increases for retirees to restart and would help out bond ratings. He said perhaps 40 percent of the money kicked in could come from the federal government.

As previous, a number of interest group supporters spoke in favor of the bill. But a representative from the governor’s office seemed to throw cold water on the bill, arguing that perhaps a constitutional change would be better to reduce the liability due in 2029, lowering it from 100 percent. Sen. Chris Ullo wondered about the status of new estimations of revenue and of assistance bills from the federal government, and was told substantial one-time costs were upcoming. Sen. Art Lentini noted the teacher pay raise proposed about equaled the figure in the bill. “We should take care of the current problem,” he argued. The administration also said 15 percent probably was a more realistic figure for any federal offset.

Boasso called the administration’s testimony was “the most elegant letdown I’ve ever heard.” He said it pays bills, facilitates COLAs, and even if the time never seems right, it has to be done. Chairman Francis Heitmeier made a substitute motion to defer the bill to make it into a study, but Ullo wanted it simply deferred temporarily to wait on the Revenue Estimating Committee’s estimates. Sen. Noble Ellington objected to Ullo’s motion, so it was put to a vote and it passed 4-3. This means that the bill can be brought before the committee again this session.

HB 1260 is scheduled to be heard in the Senate Judiciary C Committee.

Republicans are always invited, and switch cards will be available.
Rep. Gil Pinac, chairman of the House Commerce Committee, after announcing at the committee meeting that the Democratic Caucus would meet later that morning.

No comments: