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Thursday, December 08, 2005

Decision on HB 213

By John L. Valentine
President of the Utah State Senate
Senate District 14

Passing HB 213 was one of those sobering instances where the responsible decision was not the most popular.

In 1984, the value of one day's sick leave was roughly equivalent to the cost of one month's insurance premium, so we created a policy allowing for an exchange at retirement. Today the value is far far less, and the gap seems to be widening exponentially. Given the spiraling cost of health care, we had to adjust that expenditure to ensure the solvency of state budget into the foreseeable future.

The Utah Public Employees Association sued the state.

This morning the Courts ruled against them.

The judge said the plaintiffs had no vested right or legal claim, and that they failed to establish that the individual harm to them was greater than harm done to the public by keeping this policy. They reiterated that the Legislature must have the flexibility required to deal with future debt, and there is no way to determine what health care costs may be 10 years from now.

The plaintiffs indicated they intend to file an appeal. At the hearing this morning they asked for an injunction pending an appeal, which was also denied.

So, the request for a preliminary injunction was denied and the overall case was dismissed.

I feel the Court's ruling was appropriate but it does nothing to dispel the somber feeling of being forced to a disappointing conclusion. Sometimes being a legislator is rewarding. Passing HB 213 was not one of those times.

We anticipate good budget news tomorrow. It would be very fitting for us to examine what more we can do for our hardworking state employees.


Anonymous The Senate Site said...

Utah was featured in a 11/23/05 Wall Street Jornal article by Deborah Solomon.

State, Local Officials Face Looming Health-Care Tab

Here's an excerpt:

"A looming accounting change is forcing state and local governments to fess up to something that's been lurking on their books for years: Many have made costly retirement health-care promises without planning how to pay for them.

"Under a new accounting rule, governments soon must start recognizing their long-term obligations to pay for retirees' health benefits -- and, for the first time, publicly disclose what it would cost each year to fund that liability.

"For many governments, the promised amount is likely to be sizeable enough to prompt big changes such as cutting retiree benefits, borrowing money and diverting tax dollars from other spending priorities -- or risk a credit-rating downgrade that could significantly boost borrowing costs."

Utah was listed as one of five states who have taken proactive steps to solve the problem.

12/15/2005 4:54 PM  
Blogger ebgi100 said...

I retired today after 30 years of state service. The insurance issue was one of the reasons for my decisions.

Since I was here in 1984, I very clearly recall the discussions behind the insurance deal. The economy was poor and the Legislature felt the public would have responded poorly to state employees receiving a raise during difficult economic times. However, they felt an increase employee benefit would show their support for state employees and the new benefit was approved.

I understand the economic challenges created in today's world of escalating health costs. Here is a recommendation. Why don't you consider an upward adjustment in all employees wages that would equal the pay increase that was deferred in 1984? It would be important that this clearly be above and beyond whatever pay raise is already being considered for state employees and would show a good faith effort by the Legislature to right what would clearly be a wrong if such action were not taken.

There may be an issue regarding what is and is not a "legal" taking, but the action of the Legislature is absolutely an "ethical" taking and my proposal, I believe, would be a responsible action during this time of budget surplus.

One final note in you will indulge me. The largest single reason I retired was not the monetary loss I would incure, but the disrespect shown by the Legislature and the Governor's Office toward state employees over the past year. The manner in which the health insurance issue was ramrodding through the Legislature and Governor's Office with a clear intent to avoid the pain of a public confrontation with state employees was inappropriate. Actions by the Governor's Office during the past year have echoed similar disdain. Over the past three decades I made a conscious decision to serve the people of Utah and accepted reduced compensation in exchange for "social compensation" associated with feeling good about what I was doing. However, I chose to not continue working for an employer who clearly did not respect that contribution.

Best of luck on this issue and I hope you will commit to an open, respectful relationship with your employees.

12/16/2005 9:54 AM  

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