ERB in SFC
The much anticipated bill that encompasses proposed changes to the educational retirement plan approved by the Education Retirement Board last fall was introduced in the Senate today. Senate Bill 150 is sponsored by Sen. Stuart Ingle, Senate Minority leader, and co-sponsored by Sen. John Arthur Smith, chair of Senate Finance, and Sen. Tim Jennings, Senate President Pro Tem. Quite the list of heavy
hitters who are taking this quite seriously.
You can read the bill and follow its progress on the UNM Bill Tracker on the government relations website. It should be posted by tomorrow.
Some members of the Senate Finance Committee (Beffort, Cisneros),who heard summaries of the proposed ERB revision (reduce COLA from average 2% to 1.75%; set minimum retirement age at 55), were curious about what other options might be on the table. Others (Leavell, Neville) questioned setting minimum retirement at 55, suggesting it was too low given a population that's living longer and a private sector whose workers don't enjoy retirement plans.
Committee chair John Arthur Smith had already briefed the audience on tanking natural gas revenues, and he cautioned that further procrastination in dealing with retirement fund solvency would only
make future action much more painful. His sobering assessment was then underscored by a couple of outside experts.
Investment banker Sean McShay suggests that the unfunded liability in both the ERB and PERA funds is really double what's being talked about, and the risk is much greater for current and future taxpayers as well as the state's bond rating. He says a three-pronged approach is the only way to solve the current dilemma - reduce benefits, enhance contributions and rethink asset allocations. Meanwhile, education retirement board member Brad Day, acting independently, asked the committee to consider resurrecting the option that was universally panned by ERB membership - eliminating
the COLA and setting minimum retirement at 62. Day believes therein lies the road to a solid retirement, not a bunch of empty promises.
On the whole, committee members were non-committal, though Sen. Smith warned the retirement boards that action may be taken now with or without their cooperation or approval. Committee members were critical of the PERA plan to continue gathering actuarial data and come up with a plan next October.
SB 150 goes to Senate Education and Senate Finance. HIRE, SB 16 and GPSA This morning, Senate Democrats, led by Majority leader Michael Sanchez, unveiled a package of bills designed to create jobs, help small business, and diversify and revitalize the economy. Their initiative is dubbed HIRE, for Helping Incentivize Real Employment. Many of the bills are the product of a task force of business, labor leaders and chambers of commerce.
Among the eleven bills is SB 16, State Graduate Employment Tax Credit, which is sponsored by Sen. Tim Keller. His bill, as now written, would give businesses a tax credit of up to $5,000 per year when they employ a graduate of one of New Mexico's universities. He wants businesses to hire NM grads and in the process, reverse the brain drain that finds many of our graduates seeking employment out of state.
Members of UNM's Graduate and Professional Students Association have been working on SB 16 and attended this morning's news conference. Because of the bill's $2 million cap, they would like to see it strategically focused on post-graduates whose fields are in STEM (science, technology, engineering and math) or health care. GPSA president Katie Richardson says this legislation provides
opportunities for graduate and professional students who want jobs in New Mexico. Currently only 40% are able to stay in the state. Tim Borror of GPSA says a survey of their membership found that 75% would prefer to remain and work in New Mexico.
SB 16 goes to Senate Corporations and then Senate Finance.
Higher Ed Budgets
House Appropriations and Finance started late this afternoon and didn't conclude their higher education hearings until the dinner hour had passed. We'll report on that hearing and its companion hearing
in Senate Finance tomorrow. Have a grand evening.