Montana Lawmakers Turn Aside Pension Funding Proposals

April 13, 2005 ( - A Montana state Senate committee has killed a pair of pension reform proposals that would have jacked up contributions from public employers across the state.

The additional revenue from the state, counties, cities and school districts was to have begun restoring solvency to the state’s pension plans now suffering from an estimated $1.2-billion potential shortage, according to an Associated Press report.

However, David Ewer, budget director for Governor Brian Schweitzer, advised the Senate Finance and Claims Committee not to move too quickly, saying that the Governor wanted more time to study the causes of the financial woes of the Public Employees Retirement System and the Teachers Retirement System, the AP report said.

Ewer said he plans to head a Schweitzer task force to develop a plan for addressing the problem and present it to a special legislative session expected to convene late this year to act on a new school funding system.

The Democratic-controlled committee shelved both bills on votes of 16-3 and 13-6. Some Republicans on the committee opposed the move.

The bills – one dealing with each of the retirement systems – would have increased local property taxes an estimated $15 million over the next two years to provide the money that local governments and school districts would need to pay more into the pension plans.

Republican Senator John Esp wondered if a failure of the Legislature to act now will result in a drop in the state’s bond rating, something that would increase government’s cost of borrowing money. Ewer, who was a bond specialist for the investment board, assured him that would not happen as long as the state was making a good-faith effort to deal with the problem.

A House committee already has approved a bill requiring a study of the pension plans.