WHEELING - It took the West Virginia Senate just one day to pass legislation establishing a plan to pay down the state's $5 billion public retiree debt.
The Senate on Wednesday unanimously passed Senate Bill 469, which directs $35 million a year toward reducing the liability of "other post-employment benefits" owed the state's public employees. The $35 million will come from state income tax dollars currently being paid toward the state's old workers' compensation system. The workers' compensation debt is to be retired in 2016, and after this the funds would be redirected toward the OPEB liability.
The plan would pay off the $5 billion OPEB debt in about 24 years, according to Sen. Orphy Klempa, D-Ohio, a member of the Senate Finance Committee. He said the measure was introduced Tuesday, and passed out of the Finance Committee on Wednesday morning. The full Senate opted to suspend the rules and hold all three required readings of the bill during an afternoon session.
The legislation next goes before the House of Delegates, which failed to pass a similar measure approved in the Senate during the 2011 session.
"It's pretty exciting news," Klempa said of the Senate's quick passage of the OPEB bill. "This is a good, solid bill - pretty much the same bill we passed out last year. But now we have a funding mechanism, and now there's a plan to pay down that debt. In 24 years, it's off the books."
Klempa expects the House will accept the bill, noting all the stakeholders - lawmakers, state teachers and public employees - already have given their blessing to the legislation.
"I'm sure everybody didn't get everything they wanted, but they stepped up to do what is necessary to bring the debt under control," he said.
Senate President Jeff Kessler, D-Marshall, said he spoke with House Speaker Richard Thompson, D-Wayne, on Wednesday, and he is confident the House will pass the OPEB bill.
"It's huge and monumental that we got it passed in one day," Kessler said. "We are the first state in nation to address OPEB among those that have similar obligations. This shows West Virginia is ahead of the cure, and that we're serious about keeping our fiscal house in order."
Kessler added that tackling the state's OPEB had been his top priority for the session, along with passing legislation creating tax incentives for those wanting to build an ethane cracker plant in West Virginia.
The Legislature passed the cracker plant legislation last week.
Kessler said the Senate next will address the issues of substance abuse and education reform in the state.
"I suspect this is going to be a productive session," he said. "We could get done early."