Final House Vote, 2010 Special Session Omnibus Budget Bill
Kitchen table economics

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Body: House | Journal Page: 12  (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Sertich
Acting on: HF1  Date: 05/17/2010
Result: Bill Passed 97 - 32

After four months of futzing around waiting for the Feds to bail them out, the DFL were finally tuckered out and ready to head to the cabin for Spring Break.  The final deal was a masterful display of the art of kicking the can down the road to the driveway of the next legislative session.  The bill included the K-12 shift good through 2013, a total 180-day holdback of corporate and sales tax refunds to allow the MMB bookkeepers to show an additional $152 million.  Local aids (including reductions to the Local Government Aid formula) account for $299 million for the biennium; Also adopted the governor’s cut to renters credit of $52.3 million.  A number of accounts were raided to help shore up the numbers.   In the end the "solution" was a collection of shifts and holdbacks and transfers.   Vote Red. 

(Updated: 08/17/2010 | Copyright © BillsandVotes.com) 

Urgency Declared
Administrative and Noncontroversial

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Body: Senate | Journal Page:  9 (Click to view vote.)
Scored? No | 
Author: Pogemiller
Acting on: 1  Date: 05/17/2010
Result: Motion Prevailed 55 - 7

This vote is a formality to allow the Senate to suspend the Constitutional requirement that SF 1, the Special Session budget agreement, be given a second reading before passage.  Not scored.

(Updated: 08/17/2010 | Copyright © BillsandVotes.com) 

Final Senate Vote, 2010 Special Session Omnibus Budget Bill
Kitchen table economics

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Body: Senate | Journal Page:  13 (Click to view vote.)
Scored? Yes | Right Vote: N
Author:
Acting on:   Date: 05/17/2010
Result: Bill Passed 52 - 14

See:  Final House Vote, 2010 Special Session Omnibus Budget Bill.  Vote Red.

(Updated: 08/17/2010 | Copyright © BillsandVotes.com) 

Final Senate Vote, Omnibus Government Worker Pensions Bill
Taxpayers versus Government Workers

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Body: Senate | Journal Page:  11344 (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Betzold
Acting on: SF2918  Date: 05/12/2010
Result: Bill Passed 52 - 14

Much is this bill is an exercise in tweaking the valves in the dank old boiler room where the $50 billion Government Pension Machine sits.  The union bosses at the controls have changed minute little settings, like cutting the interest rate on refunds from six to four percent and ratcheting back the increase in benefits by half a percent.  They've re-tuned state government's largest money machine to make it a tad more efficient -  at least until the heat is off.  

The few reductions in the increases and increases in the reductions are temporary and subject to change just like every other provision in the laws that government Minnesota government worker pensions. Bookkeeping gimmicks designed to make the funding status of each plan look better on paper include rolling the full funding dates forward (think of your mortgage coming due in a few years and the bank showing you owe more than you should - adding another 10 or 20 years to the due date will make things look much better - or at least postpone any painful decisions). 

New Hires 
In keeping with the union dogma on Seniority, new state and local government hires get hit hard by the pension changes in SF 2918.  They will have longer vesting requirements, lower deferred augmentation rates, lower accrual rates and retention of coverage limits to save some bucks system-wide going forward. 

But before we start shedding tears for the new guys, keep in mind that these employees still receive something you only wish you had:  A defined benefit pension plan backed by the taxing power of the State.  And when the economy starts to turn around post-Obama and the new guys start building seniority and start thinking about their retirement, you can bet they are going to be looking to make up the difference.  And if history is any guide, they will succeed.

Increased costs to taxpayers
The big money in pensions is the contribution rate from you, the taxpayer.  Know as the "employer contribution," this is the percentage of payroll that the taxpayers are obligated to contribute to each employee's pension account.  SF 2918 increased the amount from 15.60 percent to 18.60 for the State Patrol Plan, from 6 percent to 6.25 for the PERA-General Plan, from 14.1 percent to 14.4 percent for the PERA Police and Fire Plan. 

For the teacher's retirement plan, basic members (those with much higher state benefits due to their lack of Social Security coverage) receive taxpayer contributions that ramp up two percent from 9.5 percent to 11.5 percent of payroll over four years.  For coordinated members (those with Social Security coverage), the taxpayer contribution is increased from 5.5 percent to 7.5 over four years. 

(In future articles, BillsandVotes.com will tally up the cost of these contributions.  When added to contribution hikes passed nearly every year since 2005, the total new money for state and local pensions will be in the $1 billion range.  And that's new money only.)

Contribution rates on autopilot
In addition to direct increase in taxpayer contributions, SF2918 also ramps up the automatic contribution rate hikes allowed under current law.  Triggered by funding deficiencies (and, theoretically, funding sufficiencies), the amount of money that taxpayers are legally obligated to contribute will ramp up via the contribution adjustment mechanism.  This controversial bit of pension law was passed in a very limited manner a few years back, but was greatly expanded in SF 2918.  It used to be that contribution rates, since they are so closely related to government's power to tax, were only done via direct legislative changes in bills passed by the House and Senate and signed by the Governor. 

Not anymore.   SF 2918 authorizes that under the right circumstances a taxpayer contribution rate hike of up to 0.75 percent of payroll for the teachers plan and the local government plan can be made administratively.  The Legislature must take action to stop the increase or it goes into effect with no fanfare.

Decreases in the increases
Deferred annuities augmentation rates:  This is the compound interest rate at which an employee's pension assets grow during the period between leaving their government job and collecting a pension.  The current rate varies by plan, but can be as high as five percent compounded per year.  For several plans, the bill drops that rate to one percent and zero percent after 12/31/2011.  If you go straight from Agencyville to retirement, there's no impact. 

Annual benefit increases:  Plans that offer their retirees an annual increase to stave off inflation will get a smaller bump as long as their funds are in the red.  These reductions in increases vary by plan, and are, like all else in Minnesota pension law, subject to change, most likely in an upward manner. 

Although you sort of have to read between the lines, the excellent session summaries posted by the Legislative Commission on Pensions and Retirement (LCPR) will give you a full accounting each annual pension bill.  Spend some time learning the lingo.  It's your money that's being spent, after all.

While the vast majority of private sector employees have seen their 401K plans dry up and blow away - while hardworking taxpayers have had to postpone the secure retirements they deserve - the Governing Class will hardly feel the pea that the down economy has placed under the stack of mattresses they sleep on.  Vote Red on SF 2918.

(Updated: 08/25/2010 | Copyright © BillsandVotes.com) 

Final House Vote, Omnibus Government Worker Pensions Bill
Taxpayers versus Government Workers

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Body: House | Journal Page: 12672  (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Murphy, M.
Acting on: SF2918  Date: 05/12/2010
Result: Bill Passed 116 - 16

See:  Final Senate Vote, Omnibus Government Worker Pensions Bill

(Updated: 08/23/2010 | Copyright © BillsandVotes.com)