CHARLESTON — Senators balked at giving school boards a one-year reprieve in paying retiree benefits Wednesday but approved a plan to bail out troubled municipal pension funds.

By suspending its rules, the Senate raced through the special session agenda, save for Gov. Joe Manchin’s bid to let county payments into Other Post Employment Benefits ride for a year.

Delegates advanced bills to today’s third reading, or voting stage, with a right to amend and House Majority Leader Brent Boggs, D-Braxton, said the OPEB measure is still alive since it remains on the calendar.

“We’re planning to move the bill forward at this point,” he said.

Manchin’s defeat came in the Senate Finance Committee, whose chairman, Sen. Walt Helmick, D-Pocahontas, said the matter is too large and complex to stall at this stage with the one-year reprieve for school boards.

“It is the biggest issue facing this state,” Helmick said.

“It distracts us from doing basically anything else we want to do. I don’t want to play games with anybody, just address this issue.”

Manchin planned to huddle with senators Wednesday night, saying he was puzzled by the committee action since his approach was merely to forestall county OPEB payments for one year while the liability mounts.

“I don’t know whether there’s a misunderstanding, or just basically they have not been comfortable, thinking we’re assuming liability for the counties,” the governor said.

“That’s not it at all.”

Manchin said both houses realize the issue is a serious one and needs to be worked through for a solution, adding lawmakers might prefer to tackle it in January.

“I thought we were OK and I thought everybody was on agreement,” the governor said.

Helmick said the Manchin proposal wasn’t clear as to what direction the governor had in mind in dealing with OPEB.

“The time has come in West Virginia we can no longer put something under the table, under the rug,” he said.

“It’s got to be put up on front. We need to see who owns this issue and how much it is. I think the state is on the hook for a huge amount of obligation.”

Many school boards have vowed to sue the state over the matter.

With one dissenting vote, the chamber approved a three-pronged gas tax bill.

One part eliminates the reduction of the flat rate component in the fuel tax from 20.5 cents per gallon to 15.5. Otherwise, the Legislature would have to extend the 5-cent hike again in 2013.

A second portion raises the minimum average wholesale price in the escalator to no less than $2.34 a gallon.

“We’re stabilizing it,” Helmick aid.

Under the bill, the variable component cannot fall below 5 percent of $2.34, the senator explained.

Helmick said the state forfeited $142 million by abandoning the built-in escalator that is based on the price between July and October each year.

A third part of the measure opens the door to dump the remaining $27 million of $40 million siphoned from the general revenue account two years to the struggling Division of Highways. There is one caveat — that money must be dedicated to secondary roads.

Sen. Dan Foster, D-Kanawha, who spearheaded a task force on municipal pensions, explained the “Huntington Plan” calls for cities to voluntarily amortize pension accounts over a four-decade span.

New hires would be placed into a fresh account, guarded by the Consolidated Public Retirement Board.

“My hope is that this legislation will put municipalities on the road to fiscal sustainability,” Foster said.