President's Column

President of the Senate and Lt. Governor, Jeffrey V. Kessler

Date: 02/03/2012

Senate Passes OPEB

The 2012 regular session is not even half over and yet the West Virginia Senate has already passed two monumental pieces of legislation that I believe will help our state for many years to come.

As I have previously discussed, just last week, the Senate passed a major tax-incentive bill to put West Virginia in prime position to attract an ethane cracker plant. The House of Delegates quickly passed the legislation as well, sending it to the Governor and making it the first bill of the session to complete legislative action.

On Wednesday (Feb.1) the Senate suspended the constitutional rule requiring a bill be read on three separate days to pass vital legislation dealing with other post employment benefits (OPEB). OPEB is one of the most pressing matters we have to deal with this session and we wanted to pass this bill in a very timely manner.

The plan would take $35 million a year of personal income tax collections that currently are set aside to pay down long-standing deficits in the former state-run workers' compensation program, debts that will be paid off by 2016.

Under the proposal, $30 million a year would go to into a fund to pay down the remaining $5 billion of long-term OPEB liability. Another $5 million a year would go into a trust fund to assist employees hired after July 1, 2010.

The state Public Employees Insurance Agency Finance Board made the fix easier for lawmakers by approving a plan in December, capping the amount the state will subsidize retirees' premiums at current levels with no more than 3 percent annual increases. That move cut the OPEB debt in half.

The bill also will eventually take county boards of education off the hook for OPEB debt. Those boards have been required to list the debt on their financial books the last few years. An audit will be conducted by March 31 that will show the exact amounts the counties owe for OPEB. It will eventually be paid off by the new trust fund.

The measure does not specifically spell out how the Retiree Health Care Trust Fund would be administered, but mandates the legislative Select Committee on Other Post Employment Benefits to work with the Finance Board to develop a plan.

This is monumental legislation that we have worked on for several years in the Senate. If this bill completes legislation, the money that we free up will be used to care for future generations of West Virginians. This move also makes us more attractive to business, by signaling our financial stability and our continued commitment to fiscal responsibility.

Of the states that currently have an OPEB liability, West Virginia is believed to be the first state with a comprehensive plan to deal with it. I am very proud that our state is in the forefront of dealing with this liability facing the nation and I am hopeful that the House of Delegates will pass this legislation in a swift manner.

If you would like to follow the daily action of the Legislature, visit the 80th Legislature on the web at

I hear your voice and I encourage all of you, regardless of party or affiliation, to contact me with any concerns you have regarding issues facing our district or our state. You can write to me at: Jeffrey V. Kessler, State Senate, Room 227M, Building 1 State Capitol Complex Charleston, WV 25305.

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