Senate Democratic Wrap-up for the Week of December 20, 2015

 

The Senate unanimously approved House Bill 1332, which amends the State Employees Retirement System (SERS) and the Public School Employees Retirement System (PSERS) codes to comply with federal changes made to the Internal Revenue Code (IRC).  If the state had not complied with the changes the IRC made by January, 2016, the two systems would have lost tax-deferred status on members’ contributions and interest. This legislation makes the following changes to the IRC:

Requires the plan document for PSERS and SERS members to include language on vesting in the event of termination;

  • Makes minimum distribution rules applicable to the benefit payment plans for PSERS and SERS;
  • Prevents distribution to members prior to death, disability or retirement;
  • Limits some of the annual contributions and benefits for PSERS and SERS members;
  • Prohibits SERS members from assigning or attaching benefits for repayment of credit union loans and interest;
  • Eliminates the option for SERS members to waive the payment of regular member contributions when estimated Maximum Single Life Annuity exceeds 110 percent of compensation;
  • Requires PSERS to provide sufficient notice to members electronically or by publication to inform them of provisions made from this new law.

The bill was enacted as Act 93 of 2015.

 

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In a near party-line vote, the Senate voted 33-17 in favor of House Bill 1460.  This bill is the House Republican-constructed General Appropriation proposal for the 2015-2016 fiscal year. The measure appropriates $30.3 billion.

This legislation increases state spending by $1.1 billion more than the 2014-15 budget. However, this legislation only proposes a $100 million increase to education funding as opposed to the agreed-to increase of $350 million.  This legislation appropriates more than $50 million less to human services than Senate Bill 1073 would have appropriated (the agreed-to bipartisan budget).

Although Senate Republicans were in favor of the bipartisan budget plan, many voted in favor of this legislation as a last attempt to complete a budget before Christmas. House Republicans have continued to refer to this legislation as a “responsible budget.”

Democrats doggedly expressed their continued support of Senate Bill 1073 and said they will continue fighting for adequate education funding.  This legislation goes against the agreed- to budget that the Senate, House Democrats and the governor were in favor of passing. House Republican leaders originally agreed, but their caucus members reneged.

The Governor’s line-item veto message stated that he “disapproved the unbalance nature of this budget proposal and its cuts to education funding.”

With this partial veto, the governor released essential funding for key services across the state. “This General Appropriation bill cuts $95 million from schools, instead of making historic investments as agreed to in Senate Bill 1073,” said the governor.  He also expressed his concerns that the budget sent to him would continue to increase the deficit. Gov. Wolf vetoed “some or all of the funding for several meritorious programs in order to maintain the commonwealth’s financial integrity.”

House Bill 1460 was line-item vetoed and was enacted as Act 10A of 2015.

 

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