Manchin Vetoes West Virginia Pension Bond Bill

May 6, 2005 ( - West Virginia Governor Joe Manchin has vetoed a bill aimed at helping the city of Huntington pay off its $107 million unfunded police and fire pension liability with a bond issue.

The action takes Huntington back to square one on developing a long-term solution to overwhelming financial problems that have strapped the city for several years, city officials said, according to the Huntington Herald-Dispatch news report.

Huntington’s police and fire unions, however, claimed the bill was too vague and declared the veto a victory, the newspaper said.

The bill (HB 3203) would have allowed the city to issue bonds to pay off the existing police and fire pension plans and put future hires in a defined contribution plan.

Huntington’s pension problem steadily has grown since the mid-1980s when the Legislature gave cash-strapped cities an alternative funding method for their pension plans. While the alternative method reduced minimum contributions for cities that chose to use it, it also caused their unfunded liabilities to grow.

Manchin vetoed the latest bill because it was tailored for Huntington and could not help other municipalities with severe pension problems, said Jim Pitrolo, legislative director for the governor’s office. Pitrolo also added that the governor’s decision was based only on “partial information.”

“The governor is concerned that pension problems exist in many cities,” Pitrolo said. “What we didn’t realize is the urgency facing the city of Huntington regarding this issue.” Manchin met earlier this week with various representatives of the International Association of Firefighters, which represents Huntington firefighters. The union urged the governor to veto the bill for various reasons, Pitrolo said.

The bill proposed to leave all current employees under a defined benefit plan, but switch all future hires to a defined contribution plan.

Pitrolo said Manchin is willing to work with city officials and legislators to propose a new pension bill at a special session in September. The session has yet to be scheduled.