The Omaha World-Herald reported that in his veto message, Heineman said that while he agreed with the short-term solutions in Legislative Bill 553 (LB 553), “I do not believe the proposed long-term changes contained in the bill are wise or warranted at this time.”
Heineman specifically objected to the $20 million annual increase in state contributions for the school employees’ plan, which he said would add up to $500 million over 25 years, according to the news report. He added that the bill would increase the state’s contribution but would not increase contributions from most school employees and school districts. Employees of the Omaha Public Schools would be the only exception. Their contribution rates were to increase to match statewide rates of 9.78% of income.
Actuarial studies done for the state concluded that the shortfall in the school employees’ plan would add up to $3.6 billion under current law. Under LB 553, the plan would have a surplus of $400 million and possibly as much as $1 billion. LB 553 also would make changes to help the much smaller judges’ and officers’ plans, said the news report.
However, Nebraska State Senator Jeremy Nordquist, chairman of the Nebraska Retirement Systems Committee, filed a motion for an override vote shortly after the veto was announced. The bill passed with 34 votes in its favor and none in opposition. In the short term, the bill would change accounting practices to eliminate the shortfall in the next budget period, said the news report. Long-term fixes include a reduction in retirement benefits for newly hired school employees and an agreement to continue employee contributions at the current level.