The Vermont House gave final approval on Wednesday to a pension deal brokered between lawmakers and the state’s teachers and state employee unions, advancing a bill that would trim an estimated $2 billion from the state’s unfunded retirement liabilities.
S.286 would enact into law a package of recommendations put forward by a special task force composed of lawmakers and labor representatives, in which both employees and the state would pay in more.
Labor unions agreed that workers would contribute at higher rates and see modest benefit adjustments. And lawmakers agreed to a $200 million lump-sum payment and promised to reinvest the investment dividends from higher worker contributions and the one-time state payment into more aggressively paying off the system’s debts.
“I knew our vote would signal strong backing of the pension reform effort. But yesterday’s unanimous 144-0 vote, and today’s final vote of approval, far exceeded my expectations,” House Speaker Jill Krowinski, D-Burlington, said in a statement released soon after the chamber adjourned. “It sends a powerful, unified message and leaves no doubt as to our support for our teachers and state employees.”
The House’s version of S.286 made mostly technical changes to a Senate-passed iteration of the bill — plus the inclusion of a new pension benefit group for Department of Corrections employees. In its recommendations, the pension task force charged Vermont Treasurer Beth Pearce with working with unions to figure out a cost-neutral proposal for that group. That plan wasn’t ready until the spring, which is why it was included in the House’s bill but not the Senate’s.
The bill now returns to the Senate, which is expected to concur with the House’s changes and send the bill to Gov. Phil Scott. But it’s unknown whether the governor will let the bill pass into law without his signature, sign it or veto it.
Scott has argued that the measure doesn’t go far enough to deal with the state’s $5.7 billion retirement system obligations. And he’s demanded that, at minimum, lawmakers include an option for new employees to opt out of the pension and instead choose a 401(k)-style retirement plan.
Union leaders and Pearce have argued Scott’s proposal could actually worsen the system’s problem, costing the state more to administer and drawing future workers’ contributions away from the pension fund. Democratic leaders in the House and Senate have faulted Scott for sitting out the pension debate for over a year, and said reopening the bill to make major changes this late in the legislative session is a non-starter.
Several Republican lawmakers, in both chambers, have echoed Scott’s concerns. But so far they’ve supported S.286 unanimously in both floor and committee votes.
As for whether Republicans were prepared to flip their votes to try to sustain a veto — if it comes — GOP leaders in both chambers said they did not know.
“We haven't discussed that,” said House Minority Leader Pattie McCoy, R-Poultney. “We are pretty much taking each bill day to day.”
Her counterpart in the upper chamber, Senate Minority Leader Randy Brock, R-Franklin, said much the same.
“There's no guarantee that he will veto it. But in the event that he does, then we’re going to carefully read and interpret the veto message and then make a decision accordingly,” he said.
At least one Republican said he thinks the bill is basically a done deal.
“I think it gets enacted, one way or another,” said Rep. Jim Harrison, R-Chittenden, who sits on the budget-writing appropriations committee. He said that there might be a way to mollify the governor’s concerns without making changes to S.286, including, perhaps, by asking the pension oversight committee to take a look.
He noted that Republicans alone don’t have the votes to sustain the veto in the House — unless they flip their entire caucus plus a handful of independents or Democrats.
Harrison echoed some of Scott’s concerns, and he said it’s quite possible the deal would still require lawmakers to explore further reforms in the coming years. But Harrison also said he and many of his fellow lawmakers — on both sides of the aisle — don’t want to see perfect be the enemy of the good.
“I think there's a reluctance to try to pick apart the proposal that was put forth. We can't afford to wait another year,” he said.
2022 Election Briefs
- Update voter registration by Aug. 31 to guarantee mailed ballot, secretary of state says (August 25, 4:15 pm)
- Bernie Sanders endorses David Zuckerman’s bid for lieutenant governor (August 1, 6:14 pm)
- 2nd poll shows Becca Balint well ahead of Molly Gray (August 1, 5:15 pm)
Missing out on the latest scoop? Sign up for Final Reading for a rundown on the day's news in the Legislature.