Tag Archives: Vermont National Education Association

Well, it’s not a flaming bag of poo

With no advance warning, the House Government Operations Committee on Wednesday rolled out a reform plan for Vermont’s underfunded public sector pensions. And from the unions’ point of view, it could hardly be worse.

Before I get to the details, I’ll define “no advance warning.” On Wednesday morning, the committee first heard a proposal to restructure the pensions under a single Vermont Retirement Commission. That plan was posted to the committee’s website very shortly before the hearing began. Two lawmakers broadly hinted that they were reading it for the first time, with no chance to digest or formulate questions.

Ditto the pension reform plan. It was posted to the committee’s “Documents & Handouts” webpage only two minutes before its hearing was to begin.

For an issue as complicated as pension reform, this is unconscionable.

Well, it’d be fine if we were at the beginning of a normal legislative timeline with plenty of hearings and back-and-forth and rewrites of the legislation. But as far as I can see, we’re not going to get any of that. As I said in my previous post, legislative leaders are hellbent on enacting pension reform this year. If they’re going to hew to that ambitious timeline, Gov Ops would have to vote out an actual bill within days.

There were a few signs of exactly how rushed these proposals were. Rep. Bob Hooper asked if a cost analysis had been done on the new Retirement Commission. The answer was “No.” Later he noted that the reduction in benefits seemed out of proportion with projected savings; apparently a full fiscal analysis has yet to be done.

Whenever they want to slow-play an issue, legislative leaders usually claim that there’s not enough time to give the issue the scrutiny it deserves. If this pension plan gets fast-tracked, I don’t ever want to hear that excuse again.

After the jump: The grim details.

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Gloves Off, Let’s Go

Says here Vermont’s public sector unions are feeling anxious about closed-door talks on how to fix their pension plans. Can’t say I blame them. The 2021 session is more than halfway done, Speaker Jill Krowinski is determined to get something done by then, and there’s been not a peep about what a fix might look like. And since Treasurer Beth Pearce has outlined exactly how drastically pensions might change, the teachers’ and state employees’ union have every right to be concerned.

And this is the time to show their concern through hardball, sharp-elbow politics. Give ’em hell. Threaten a cutoff of union support for any lawmaker who supports a major cut in pension benefits or a major increase in employee pay-in. Get in there and throw some elbows.

Mind you, I’m not talking right and wrong here. I’m talking the timely application of leverage.

The VSEA and VT-NEA are two of the most powerful forces in the Vermont Democratic Party. They provide financial support, volunteers, and lots of voters. They have earned a great deal of influence in party circles. That influence should be brought to bear, right now if not sooner.

You’d think this wouldn’t be necessary. You’d think the Legislature’s Demo/Prog majority would be working with the unions to resolve this crisis. But union lobbyists say otherwise.

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Pearce Makes Her Case

Well, we didn’t get our first public face-off between State Treasurer Beth Pearce and the public sector unions on Thursday. But we did get a better sense of Pearce’s argument for cutting benefits in the face of growing unfunded liabilities in the state’s pension funds.

The Senate Government Operations Committee had set aside an hour and 45 minutes to hear from Pearce and the teachers’ and state employees’ unions. But Pearce’s presentation lasted almost an hour and a half. At that point, GovOps chair Jeanette White declared that there was “no time today to hear from the unions.” They’ll be back in the virtual witness chair as soon as next week.

That should be interesting. The unions haven’t exactly welcomed pension cuts in their public reactions, but they’d be well advised to come to the committee with some ideas of their own. Because the state of the pension funds — especially the teachers’ fund — is not good.

(Pearce’s PowerPoint presentation to the committee, and her full report on the state of the pensions, can be found on the GovOps website.)

And the unions ought to be prepared for this. According to Pearce, she’s been meeting with them “at least weekly since mid-December” to discuss what to do. She also held virtual town meetings with roughly 1,000 members of the Vermont-National Education Association and around 350 members of the Vermont State Employees Association. She told the committee she wanted the unions to be involved throughout the process.

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Pearce’s Pivot

Still proud of her, @vtdemocrats?

At the end of last week, we got a sizeable Friday newsdump from an unusual source: State Treasurer Beth Pearce. In a report on the state’s public pension funds, she called for new limits on pensions for state employees and teachers. It was duly reported, first by VPR and then by VTDigger, but neither story captured the significance of Pearce’s pivot.

This is, in my view, the single biggest position shift by a top Democratic officeholder since Peter Shumlin abandoned single-payer health care in 2014. That move brought Shumlin’s political career to an ignoble conclusion, since he’d staked his governorship on delivering single-payer. I doubt that Pearce will have to slink off into the darkness, but she might not get the rapturous receptions at party functions that she’s gotten used to.

The pension plans don’t have enough funds to pay promised benefits because, through most of Howard Dean’s governorship and about half of Jim Douglas’, the state consistently shorted its annual contribution. Many have called for a shift from defined-benefit to a 401K-style defined-contribution plan. The former promises definite retirement benefits; the latter only promises to contribute money to the plan. Actual benefits depend on the health of the pension fund.

Pearce had been a champion of retaining defined-benefit. She’s an expert at public finance, so her view has carried a lot of weight. Now, she has abandoned that position. She still supports defined-benefit plans… but she has effectively changed her definition of the term. That’s a big, hairy deal. It puts legislative Democrats under pressure to go along with pension cuts — and that threatens to drive a wedge between the Vermont Democratic Party and two of its biggest supporters: the Vermont State Employees Association and the Vermont National Education Association.

I can’t say I blame her, given her recitation of the facts. But this could touch off a political shitstorm.

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