Legislation that strips significant power from the board that governs the state's public employee pension program has passed both chambers of the Legislature.

Under the legislation set to go to Gov. Tate Reeves during the final days of the 2024 session, the Public Employees Retirement System Board would no longer have the authority to increase the contribution rate levied on governments (both on the state and local level) to help pay for the massive retirement system.

The legislation, which passed both chambers in recent days, was a reaction to the decision by the board to increase by 5% over a three-year period the amount local governments contribute to each employee's paycheck for their retirement. Under the PERS Board plan, the employer contribution rate would have been increased to 22.4% over three years, starting with a 2% increase on July 1.

The board said the increase was needed to ensure the long-term financial stability of the system that pays retirement benefits for most public employees on the state and local levels, including staff of local school districts and universities and community colleges.

City and county government officials in particular argued that the 5% increase would force them to cut government services and lay off employees.

Under the bill passed by the Legislature there still would be a 2.5% increase over five years — a .5% increase in the employer contribution rate each year for five years.

In addition, legislative leaders said they plan to put another $100 million or more in state tax dollars into the retirement system in the coming days during the appropriations process.

Under current law, the PERS Board can act unilaterally to increase the amount of money governmental entities must contribute to the system. But under the new bill that passed both chambers, the board can only make a recommendation to the Legislature on increasing the employer contribution rate.

The PERS Board also would be required to include an analysis by its actuary and independent actuaries on the reason the increase was needed and the impact the increase would have on governmental entities.

In the 52-member Senate, 14 Democrats voted against the bill. Only one House member voted against the proposal.

Sen. David Blount, D-Jackson, said the bill failed to address the financial issues facing the system. He said a permanent funding stream is needed.

Blount said, “You are moving in the wrong direction and weakening the system” with the bill the Legislature approved. “Is it painful? Is it going to cost more money? Yes, but we need to do it” to fix the system.

The system has assets of about $32 billion, but debt of about $25 billion. But Sen. Daniel Sparks, R-Belmont, and others argued that the debt was “a snapshot” that could be reduced by strong performance from the stock market. The system depends on its investments and contributions from employers and employees as sources of revenue.

The system has about 360,000 members including current public employees and former employees and retirees.

The legislation states that no changes would be made for current members of the system. The legislation does reference looking at possibly changing the system for new employees. But that would be debated in future legislative sessions.

The bill does not include an earlier House proposal to dissolve the PERS Board, which consists primarily of people elected by the members of the system, and replace them with political appointees.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

Kathleen O'Beirne knocked loudly on Sen. Kevin Blackwell's office door in the basement of the Mississippi State Capitol on Saturday morning.

O'Beirne, a Ridgeland resident and mother of two boys, has been closely tracking the back-and-forth debate on Medicaid expansion, which Blackwell, as chairman of the Senate Medicaid Committee, is leading for the Senate. She and a group of other concerned citizens simply wanted a word with the Republican leader.

But there was no answer at the door, and there would be no conversation. So O'Beirne and the others took blank sheets of copy paper and began writing letters. When they finished writing, they taped the letters to Blackwell's door.

“I'm here because of the human cost of not expanding health care coverage to poor Mississippians,” O'Beirne said outside Blackwell's office. “But I'm also here because I'm a taxpayer. And I see that our senators are about to pass up literally billions in federal tax dollars that you and I and most other Mississippians already pay. We have the chance to bring all of that money back to the state of Mississippi, but we're about to walk away from it for no good reason.”

As O'Beirne and other Mississippians have closely followed, Blackwell has been as dug-in as any lawmaker during the Medicaid expansion fight. This week, after agreeing to hold public conference committee meetings to debate Medicaid expansion, he refused to meet a second time with his House counterparts. He has seldom engaged with House Republican leaders in private, either.

He did, however, choose to speak to a gaggle of reporters on Friday after the Senate sent a compromise plan to the House for consideration. In the interview, he drew hard lines against any additional compromise with the House, specifically around a work requirement, and even doubted whether his own plan had the necessary support from his Republican Senate colleagues.

READ MORE: Blackwell says Senate won't budge on Medicaid work requirement

Blackwell and some Republican senators have long maintained that any expansion deal must include a requirement that Medicaid recipients work, which is a conservative policy desire that the federal government has struck down in 13 previous expansion states. Including a stringent work requirement, health care advocates and legal scholars believe, would effectively kill any expansion plan.

But in the plan the Senate put forward on Friday, they would still mandate the requirement. It would also force the state's attorney general to sue the feds over any rejection and hope that a conservative 5th Circuit Court of Appeals allows the work requirement to go into effect. Unless a work requirement was granted by either the federal Medicaid agency or the federal courts, expansion could not go into effect under the Senate plan.

READ MORE: The unlikely Mississippi politician who could tank Medicaid expansion

However, an earlier House proposal also included a work requirement but would allow expansion to go into effect if the state could not convince the federal government to allow it. House leaders have not yet publicly responded to the Senate plan they received on Friday, but the work requirement piece has been the main topic of deliberations on that side of the building. 

The House and Senate Republican remained at an apparent impasse as of midday Saturday and adjourned for the day without giving any public updates on expansion negotiations. Both chambers were working into the evening Saturday and will work again Sunday to hammer out final agreements on a $7 billion state budget.

None of that sat right with O'Beirne, inspiring her to come back to the Capitol on Saturday and make the unannounced visit to Blackwell's office. When asked what message she was trying to deliver to Blackwell, she said: “Well, a compromise.”

O'Beirne then summed up what she wrote in her note to Blackwell:

“I'm a recovering lawyer, so I'm used to resolving litigation. I think there's a very obvious compromise that the Senate and the House could come to if they were willing to do the work. 

My suggestion is to keep the Senate's work requirement. Keep the provision that says if CMS kicks back the work requirement, then the AG has to sue the feds. But also, keep the House provision that will allow Medicaid expansion to go into full effect, even if CMS kicks back the work requirement.

So you go on and you start pulling down those billions of federal dollars that help the state and people get health care coverage. Then in the meantime, let the lawyers and government officials sort out the work requirement business. To me, that's a win-win-win. 

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Now, I'm sure Lt. Gov. Hosemann, Sen. Blackwell and other leaders are mulling that over. Maybe they've already had that thought. To me, it's such an obvious compromise that takes full advantage of our tax dollars. It's not wasting our tax dollars. It's helping communities. It's helping hospitals. It's helping doctors. It's helping needy patients. It is just an all around win that I sure hope they can get to.”

Kathleen O'Beirne

Such a compromise would require some careful drafting of the legislation, experts say, and whether it checks enough boxes for Blackwell and the hard-line senators is anyone's guess. But O'Beirne, a self-described “pragmatist,” felt led to share it with Blackwell on Saturday.

“I really do think there's a path here,” O'Beirne said. “It seems like a very simple solution right under our noses that Senate leaders are about to pass up. How frustrating would it be to come all this way to get nothing?”

READ MORE: These Republicans wanted a Medicaid work requirement but couldn't get approval. So they got creative.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

A new school funding formula has been approved by the Legislature that, like the long-standing Mississippi Adequate Education Program, will rely on an objective mechanism to determine how much state funding is needed to operate schools.

The push to replace MAEP has been one of most contentious issues facing legislators in the final days of the 2024 session. There have been efforts for years to replace the formula by those who say the state could not afford it.

On Saturday the 52-member Senate with three dissenting votes passed on to the governor a compromise proposal to replace MAEP. The House had unanimously passed it late Friday.

“The whole point of us doing this is to make certain our school districts are treated as fairly and as best we could,” said House Education Chair Rob Roberson, R-Starkville. He said the new formula will provide additional money for poor districts and for low-income and special-needs students.

Roberson's original bill did not include an objective funding formula, which had been the hallmark of MAEP. Senate Education Chairman Dennis DeBar, R-Leakesville, who was reluctant to rewrite MAEP, finally acquiesced, but was insistent that any rewrite include an objective formula that took out of the hands of politicians – namely legislators – the amount of money needed for the operation of local school districts.

On Saturday, DeBar told senators that if the Senate had not insisted on an objective funding formula, the Legislature could have “willy nilly” decided the level of education funding.

“This formula will allow for predictability over time. Whereas the House bill did not,” DeBar said. “It (the House plan) was a one-year thing where the Legislature could come in and decide to increase or decrease funding for education. This will hold our feet to the fire in the Legislature and ensure our schools are funded.”

House Education Vice Chairman Kent McCarty, R-Hattiesburg, told House members that the objective funding formula made the original House proposal stronger.

“I think this is a good addition to the bill,” he said. Like MAEP, the formula will be recalculated every four years and in the intervening years there will be an inflation factor added to the funding.

Under the new formula, schools will receive per student the average teacher salary divided by 14, which represents the average student-teacher statewide ratio. In addition schools will get another 20% of that amount for administrative costs, 30% for ancillary costs and money for operations and maintenance based on the three-year, per-square-foot average of the school district's operations and maintenance costs.

On top of that, the school districts will receive additional funds for students in certain categories, such as for special-education students, those living in poverty, or living in areas of high poverty and for students who do not speak English as their primary language. The additional money provided to categories of students was a key component of the original House bill.

Like MAEP, local school districts will be required to pay a portion of the cost. But wealthier districts will be required to pay more than districts with a smaller local property tax base. No district will be mandated to pay more than 27% of the cost.

Sen. Hob Bryan, D-Amory, one of the architects of MAEP in 1997, was one of the three no votes.

While Bryan said there appeared to be good features to the new funding plan, more time was needed to study it.

“It is simply not possible to enact a funding formula for public education in this legislative session where we know what we are doing,” he said. “We don't have enough time for people to look at the new proposal, consider alternatives.”

Bryan pointed out that if MAEP was unpredictable for school districts it was because of the Legislature's refusal to fully fund it. He said it is possible – even likely – that the same will occur with the new formula.

MAEP had language saying the formula “shall” be fully funded, But the full funding mandate was ignored every year since the program was fully enacted in 2003 except for twice.

Under the first year of the new formula, which goes into effect with the beginning of the new fiscal year on July 1, K-12 education is supposed to receive an additional $230 million.

The additional funding will bring the education budget to $2.94 billion – about $50 million less than MAEP would have provided if fully funded.

DeBar said that based on inflation it will take about $50 million more in funds to fully fund the new formula next year.

The new formula will be called simply the Mississippi Student Funding Formula.

Sen. Angela Hill, R-Picayune, voted against the proposal because she feared that like MAEP the new formula would make a commitment over time the state could not afford. Plus, she said she was concerned about the money going to educate students who spoke English as a second language. Hill said she wanted more details on that feature of the bill.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.