TO:                   THE PENSION BENEFITS TASK FORCE
FROM:             PATRICIA MCDONALD – PRESIDENT, CAMPAIGN FOR VERMONT PROSPERITY
DATE:              DECEMBER 6, 2021
RE:                   FOLLOW UP FROM TESTIMONY ON DECEMBER 1, 2021

Dear Members of Pension Benefits Task Force:

First, I want to thank you for giving Ben Kinsley and me the opportunity to present the findings of our report entitled “The Public Sector Reality.” The purpose of this report was to examine the overall competitiveness of our public and private employee wages. We believe this question does have an impact on how we should address the pension crisis because it gets at what level of benefits we should be offering to new hires. We cannot meaningfully change the promises we have already made to fully vested employees (nor should we), but we can make adjustments for new employees as a large portion of our workforce potentially turns over within the next several years.

It turns out that some government officials have known for a while that state government salaries are competitive. This letter (dated October 29, 2009) from Jeff Carr to Governor James Douglas about a review of a VSEA memo to Donna Sweaney, Chair of Government Accountability Committee. Carr’s letter, over a decade old now, points to many of the same factors we found in our recent report around compensation levels and the growth rate of state employee compensation compared to the private sector.

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At the 8/17/2021 task force meeting, Chris Rupe (part of the Joint Fiscal Office) submitted a document entitled: impact of various possible changes to plan design. The task force reported that there are various scenarios that are being considered, to include:

• Adjusting employee contributions to the pension plans
• COLA (cost of living) adjustments for active employees, for all except those within 5-10 years of retirement
• New one-time or ongoing revenue sources. None yet been selected, but under consideration are:
  • Cannabis tax revenue
  • Sports gambling
  • High-income tax surcharges
  • Elimination of capital gains income tax exclusion

Wow, it has been a year, hasn't it?

Between major federal costly government initiatives, the delta wave, workforce shortages, historic inflation, and supply chain nightmares I think it is safe to say we are all exhausted. And that was just the last six months. It almost seems like 2020 never ended, it just continued right on through 2021 and will end... who knows?

At the state level we are not immune to the national headwinds, we feel all of those developments here as well. In fact, we have a few of our own to add to the list: our waterways continue to degrade while our attempts to eliminate point-source pollution fail to find meaningful success, we have spent another year debating pension reform after the deficit in our pension obligations grew by $1B in 2020, affordable housing is impossible to find, emergency measures to connect rural Vermonters to broadband internet have ended long ago but the need is still painfully apparent, and our state college system is still in financial crisis and needs transformation into a vibrant educational ecosystem.

On November 10^th Campaign for Vermont (CFV) held a press conference to review the details of its report entitled The Public Sector Reality. For the record, I am the President of the Board of Directors of CFV.  Over the past months of pension discussions at the Legislature we heard claims about the state’s non-competitive wages and we decided to verify those statements. We set out expecting to find that pension benefits were an unquestionable asset to recruiting and retaining our public sector workforce. What we found surprised us.

November 10, 2021

CONTACT:
BEN KINSLEY
(802) 310-3904
[email protected]

Montpelier, VT – On Wednesday Campaign for Vermont (CFV) released a new report that compares the wages and benefits of teachers and state employees to the private sector and what that means for the current discussions around pension reform.

“As a former Commissioner of the Department of Labor and Commissioner of Human Resources, I was surprised by what we found in this report,” said CFV President Pat McDonald, “I think everyone needs to read this report because there were a number of assumptions that were carried through the years that were just plain wrong.”

FOR IMMEDIATE RELEASE – June 14, 2021 (updated 6/24/2021)

CONTACT:
BEN KINSLEY
(802) 310-3904
[email protected]

Campaign for Vermont (CFV) has long been an advocate for pension reform. After nearly a decade of obstinance, to our surprise, this year the legislature took the first steps towards meaningful action. While they passed on addressing benefits in the 2021 legislative session, they did set aside pre-funding for pensions and created a task force to look at benefits and bring back recommendations this Fall. We fully expect that the legislature will pass meaningful pension reform early in 2022 that balances our commitment to public employees and the liability for taxpayers. This is a critical balance to strike.

Senate Government Operations Committee

Dear Madame Chair and Committee Members,

Campaign for Vermont Prosperity (CFV) has been following the Pension Liability issue throughout this legislative session and has weighed in from time to time.   Before we comment further on H.449 we would like to recognize the work that the House and Senate Government Operations Committee, the Treasurer and so many others have done to bring the attention due to this critical issue. The comments below are reflective of the “Draft – As Amended After Second Reading 2021” document.

Thousands of state employees and teachers are counting on the stability of pension funds and the longer we wait the worse the problem gets. Two weeks ago we called on the legislature to pass balanced pension reform that does not put the burden of solving the issue solely on taxpayers or employees. If you missed it, you can find our press releases here.

In order to further our goal of accountability and meaningful action on pension reform, we would like to investigate potential conflicts of interest that lawmakers might have. For example a legislator who is currently receiving pension fund benefits or a spouse who is a covered employee. But, we need your help to do it. We need to raise $2000 to complete a review of all 30 members of the Senate.

Your pledge of support will allow us to do this work and publish a list of legislators who should recuse themselves when a pension bill comes up for a vote on the floor.

PRESS RELEASE - APRIL 7, 2021

Campaign for Vermont has long been an advocate for pension reform. After nearly a decade of stubbornness, to our surprise, the legislature is now poised to take meaningful action. The pension policy recommendations that emerged from the House Government Operations Committee last week is surprisingly comprehensive despite its 11^th hour appearance. Not surprisingly, the teachers and state employee’s unions have summarily condemned the proposal.