HELENA – Republican lawmakers and the governor’s office indicated they backed opposing solutions for the state’s dwindling public pension fund Tuesday as a new legislative committee held its first meeting to find a fix for the system.
Little middle ground in the pension debate was apparent Tuesday at the first meeting of the latest legislative committee charged with finding a politically palatable fix to the beleaguered system.
The new, Republican-led Joint Select Committee on Pensions hopes to find a solution by next month amid dozens of pension proposals. And it wants to produce a bill that can get the support of Democratic Gov. Steve Bullock.
But it quickly became clear Tuesday that a big partisan bargain on the prickly political problem won’t be easy.
Republican legislative leaders indicated that they want a fix that includes something other than a pension, at least for new employees. Many GOP lawmakers argue the current public pension system, which includes both state and local government employees, is too expensive.
But the governor’s office told the panel that it opposes getting rid of the pension program for new employees. Bullock is touting a proposal that asks both employees and employers to pay more into the current system, which would cost the state more than $60 million for each of the two years.
Bullock Budget Director Dan Villa said the governor won’t support a switch to a defined contribution, cash balance or hybrid plan as sought by some Republicans. He argues the governor’s budget proposal shows the system can be fixed for current and future employees without raising taxes.
The position left Republican leaders wondering if any deal can be reached.
“I took it as them drawing a line in the sand, which is unfortunate,” said Sen. Dave Lewis, a Helena Republican chairing the 12-member committee featuring members from both the House and Senate. “We still have to figure out what we need to do, present it to the governor and see what happens.”
House Speaker Mark Blasdel, R-Somers, called the governor’s position “unfortunate.”
“I hope we can go into this with an open mind,” Blasdel said. “I think it’s imperative that we try to tackle this issue.”
In past legislative sessions, the thorny political issue has been kicked down the road for further study amid big partisan differences.
The pensions systems have a projected deficit of about $4 billion in 30 years if nothing is done. And the state faces the threat of a lawsuit — and a court-ordered fix — if the problem persists.
David Senn, director of the Teachers Retirement System, said it would take long-term investment returns of 9 percent — generally considered not possible — to repair the current system without cash infusion. He offered a blunt assessment if stalemate again grips the issue.
“What happens if we do nothing? We go in the tank,” he said.