General Session 2016: Week 4

...and so we entered the 4th week of the General Session.

Pension Reformishness

This week we heard Representative Cunningham's Retirement System reform proposals.  We packed an entire meeting agenda with 5 of his bills.  Yet, in a remarkable twist, the presentations went so long (90 minutes!) that we weren't able to take action on any of them. We adjourned and put one of the bills on the agenda for Wednesday so we could at least vote up or down on the subject.    

The bill we discussed at the later meeting proposed to change the time frame allowed for teachers and public safety employees to return to the job.  Currently, once they 'retire', they are allowed to come back to work in a year's time.  The bill would allow them to do so in 60 days.  Police and teachers are in scarce supply right now and agencies felt that this change would help alleviate some of the pain they are feeling.  I voted for the bill and it barely passed our committee on a 7-6 count.  

Unfortunately, the bill has the potential to add over $200 Million to the unfunded liability that exists in our URS.  Yet, the current unfunded liabilities are over $3.5 BILLION (!).  The reforms enacted in 2010 to the system have kept the ship from sinking...for now.  The system is listing and has been since the stock market collapse in 2009 put the system into distress.  We are told by the experts that if the stock market crashes again, Utah's system could sink entirely and taxpayers would be on the hook for the billions of dollars in retirement payments to state and local government employees.    

URS Unfunded Liability

While my local law enforcement and city officials pushed for this bill to pass, I have warned them it may very well be a Pyrrhic victory.  In my view, we could be sounding the alarms to abandon ship within the next three years.

Upending SB54

Earlier in the session Rep. Fred Cox opened a bill file that made some very minor adjustments to election law. His bill also happened to open up the code section dealing with SB54.  One of the rules we have in the House is that any amendments or substitutions of a bill must be germane to the code section being affected.  Since SB54 and the petition process is the source of so much consternation among folks in the political parties (mainly GOP), it isn't to surprising to discover that a substitute appeared related to this subject.  In this case, Rep. Fawson proposed to repeal SB54 via his substitute.

There is a lot of backstory and ongoing litigation on this subject, but the vote basically came down to whether we thought the new system was a fair balance or whether we felt it was a giant mess.  I find myself in the latter camp.  The petition process in its current form actually violates the spirit of grassroots participation that inspired its creation.

I voted to support the substitute.  However, the vote to substitute failed 30-42.  Close, but not quite.

Income Tax Exemption For Veterans

We heard a bill in our Revenue and Taxation committee that proposed to exempt retired veterans  from income tax.  Currently, every dime of our income taxes pays for education which is cash strapped already.  The bill would cost the schools $17M in funding...or enough to pay over 280 teachers.  I pointed out to the bill sponsor (and all the retired veterans in the room) that he was asking us to choose between our veterans or our school kids.  That statement put the room in a mild uproar.  While our veterans certainly deserve to be rewarded for their courage and valor, in my view, this was the wrong tool to do it.  Our committee did not move the bill forward but recommended the bill be held with the possibility of further study over the summer months.

The Solar Circus

I released by bill this week to taper income tax credits available to the solar industry.  My premise for running the bill was that the industry is maturing to the point that taxpayer support may no longer be needed.  I reached out to Vivint and other industry stakeholders to begin discussions.  In our meeting we agreed the industry is blossoming that at some point in the future, yet undetermined, taxpayer subsidies will not longer be needed.  Ironically, in majority caucus the next day, we discovered that the industry is asking for MORE taxpayer subsidies in the form of sales tax exemptions to help spur their business.  So, clearly, there is a dissonance in how we each view the industry's current health.  I will be taking this issue to the interim for further study so we can get to the bottom line of when the industry will be ready to be weened from taxpayer subsidies.  

Tax Credit Review

My bill to create a systematic review of income tax credits flew through committee unanimously this week.  It will be presented on the House Floor in coming weeks.

COMING SOON...

Look for more unexpected twists and turns as the Legislature churns through the issues an an ever increasing rate.