Bluefield Daily Telegraph, Bluefield, WV

State News

December 19, 2011

Capital Focus: W.Va. lawmakers see major gains heading into 2012

CHARLESTON (AP) — What a difference a month makes.

West Virginia officials gained major ground in December on two of the most pressing problems bedeviling the state.

After years of debate and failed measures, the Legislature passed a wide-ranging regulatory bill last week directed at natural gas drilling in the Marcellus shale.

That special session action coincided with the launching of a plan that will cut a $10 billion, retiree-related funding shortfall by half. The Public Employees Insurance Agency voted to limit increases of the premium subsidy provided to retirees at 3 percent a year.

Before the vote, Executive Director Ted Cheatham explained the resulting impact on the liability from other post-employment benefit, or OPEB, costs to the agency’s finance board.

“Under this solution, at the way you’re currently structured, OPEB for the state of West Virginia will be fully funded in the year 2040, without us even putting any more money in the pot,” Cheatham said.

Officials had expressed doubts about seriously tackling either problem just a month ago. The OPEB shortfall, which mostly reflects health coverage promised to public retirees, had vexed legislators during the last several sessions. The state Supreme Court recently rejected a request by county school boards to weigh in on the issue.

Lawmakers in early November also weren’t sure a special House-Senate drafting committee would complete a Marcellus proposal, or endorse it. Delegate Bill Anderson was among several legislators who heralded the Marcellus bill as historic and monumental before its final passage Wednesday.

“This is one of those days that we’re going to look back on, and we’ve sent a message, I believe, to this country that we can manage our own affairs here in West Virginia,” said Anderson, a lawmaker since 1992. The Wood County Republican added, “In the big picture, we’re on the verge of setting down a policy that will communicate to the business community, not only in this state but throughout the nation, that we are in fact open for business, these are the rules of the game, we encourage you to invest in this state, we want to work with you, for your development and profitability as a company.”

But the strides seen in December don’t mean that either issue is completely resolved.

OPEB still requires legislative attention, if officials want to close the funding gap before 2040. Sen. Brooks McCabe has been studying the issue for years. He believes that dedicating around $30 million in revenues annually toward the shortfall will erase it a decade or so earlier.

Gov. Earl Ray Tomblin is considering different potential sources for this yearly funding. They include personal income tax proceeds that are curing a liability related to the former, state-run workers’ compensation program. Officials expect that account will be properly funded by 2016.

County school boards also continue to complain that they’re wrongly required to account for the share of the shortfall traced to teachers paid with state funds. McCabe said lawmakers could decide to shift the burden of state aid formula-funded employees to the state. Officials estimate that this step would relieve the school boards of 90 percent of the liability the now must either fund or list as debt on their books.

Senate President Jeff Kessler named McCabe, a Kanawha County Democrat, to a special Senate Finance subcommittee focused on OPEB. Senate Education Chair Robert Plymale, D-Wayne, will chair that subcommittee. Kessler cited Plymale’s background with pension programs.

“West Virginia’s fiscal house is in order with the exception of one major outstanding issue, and that’s OPEB,” Kessler, D-Marshall, said in a statement. “I want to tackle OPEB and get it under control. It’s the last piece of the long-term financial debt problem that is on our plate.”

Legislators can also expect Marcellus-related proposals come January. While urging support for passage, House Judiciary Chairman Tim Miley noted that some lawmakers opposed the bill’s provisions addressing water supply and surface owner protections as inadequate. The Harrison County Democrat said the Legislature could revisit these provisions in 2012 if concerns persist.

Delegate Mike Manypenny, D-Taylor, plans to take Miley up on that.

“I hope that I can get your support in January for twenty-something separate bills that I have already sent down to drafting, to try to strengthen the regulations for the citizens of this state.,” Manypenny said, before he and four other delegates voted against the bill. He also said, “I may have lost, or some of us may have lost the battle, but we haven’t lost the war.”

Lawrence Messina covers the statehouse for The Associated Press. Follow him at http://twitter.com/lmessina

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