By Mannix Porterfield
Putting the staggering post-employment health care costs of retired state workers on a payment plan has turned West Virginia into “the shining star of the nation.”
So opined Sen. Brooks McCabe, D-Kanawha, the point man in a years-long battle to find a way to dry up the massive red ink known as Other Post-Employment Benefits, or OPEB.
Until the Public Employees Insurance Agency moved to reform the issue in December, the liability stood at a staggering $10 billion.
Now, it’s about half as much, and with SB469, it can be eliminated by 2036, Gov. Earl Ray Tomblin noted Monday, in signing what he termed “a monumental step forward.”
“We in West Virginia are the first to solve it,” Tomblin said at a bill-signing ceremony, attended by a number of legislators.
“We take the last step toward ending our long-term debts.”
Under the plan, $30 million now taken from the personal income tax to pay off the old Workers’ Compensation debt will go toward OPEB, beginning in four years.
Additionally, the bill sets up a special trust fund to cover employees hired after July 1, 2010, with an annual installment of $5 million — a move some House Republicans charged would only spawn a new liability down the road.
In his former role as Senate finance chairman, Tomblin pointed out a 40-year plan was devised to pay off the teachers retirement debt.
“OPEB will be solved in half that time,” he said.
“Ratings agencies will look more favorable on West Virginia as we institute a plan to pay off OPEB.”
Education will reap immediate benefits, by relieving school boards of $485 million in future liability payments, Tomblin said.
That means counties can start plowing the savings into other needs, the governor noted, helping boards and students alike.
“This legislation already has the rest of the nation looking at us,” Tomblin said.
“States seek to follow our footsteps. This legislation is about the future of our children.”
Senate President Jeffrey Kessler, D-Marshall, pointed out the Legislature in two months has dealt with two key matters — Marcellus shale regulation and the OPEB debt.
“We’re not only ahead of the curve,” he said, comparing West Virginia to other states.
“We’re leading the charge. We’re getting things done. We have all long-term debts in order. That’s going to have huge dividends for the state of West Virginia, for my children and my grandchildren. Money used to pay for sins of the past will no longer be required to do that. We can look at other needs.”
McCabe agreed, saying the removal of the OPEB cloud means West Virginia can turn its attention to other deferred matters.
By clearing up the OPEB riddle, he said, “West Virginia is really the shining star now of this nation.”
And that means the state can engage some “heavy lifting,” such as roads and bridges and pay raises for public employees, he said.
“Now, for the first time, we have really eliminated the financial sins of the past,” McCabe added.
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