The first deadline has passed. Because of weather, most of the first week was lost and many bills were not heard. Currently, the most active issues are pensions, insurance, and government modernization. “Dormant” means the bill is inactive for this year.
Pensions
OPEA was successful in defeating HB 1003 (McDaniel), which would move new employees to a defined contribution plan with only a 3.5 percent employer match. Currently, the state contributes 15.5 percent to employee retirement. The bill passed committee, but was not heard on the House floor.
Of greater concern are two bills that are in the process that severely limit the legislature’s ability to provide COLAs to retirees.
HB 2132 (Steele and Bingman) requires that all COLAs be funded by the legislature and not taken from the assets of the system, no matter how well funded the system. This bill applies to all six pension systems. Under the provisions of HB 2132, the Board of Equalization may determine the appropriated funding for a COLA is not adequate and overturn the action.
SB 891 (Mazzei and McDaniel) requires that all COLAs be funded by the legislature and not taken from the assets of the system, no matter how well funded the system. This bill also applies to all six pension systems. In addition, SB 891 has the following provisions:
- Makes adjustments to the Teachers’ Retirement System including retirement calculation only on salary and not allowing employment after retirement;
- Changes final average compensation for OPERS participants from the highest three of the last ten years to an average of the last five years for new hires; and
- Raises the retirement date for new hires in OPERS from 62 to 65.
Other bills of interest:
HB 1005 (McDaniel) establishes a task force to study the best method to pre-fund COLAs and improve the funding of Oklahoma’s public pension systems.
HB 1006 (McDaniel) prohibits COLAs unless a system is 80 percent funded.
OPEA favors a compromise for COLAs that allows increases if they are funded by the legislature or a system is 80 percent funded.
Health Insurance
This session the concept of Health Savings Accounts (HSA’s) has intrigued the House, with several proposals for implementation. The first was to offer funds in HSA’s with the current HealthChoice high-deductible plan as one of the alternatives for state employees. Some legislators favor offering high-deductible health plan with an HSA as the only plan for state employees.
Rep. Lewis Moore is carrying two bills relating to state employee insurance that are not in final form:
HB 1737 deletes the requirement that state and education employees are offered the same insurance plans. The bill also requires OSEEGIB to contract for a web-based wellness program.
HB 1738 freezes the state employee benefit for three years. This would freeze the benefit allowance at a low rate because one of the HMO’s dropped out this year, lowering the average. The bill also allows the Employees Benefits Council to contract for a PPO to compete with HealthChoice.
OPEA opposes freezing the benefit allowance at this year’s rate without addressing state employee compensation. The benefit allowance is an important part of state employee total compensation. Some employees are purchasing low-option plans allowing additional funds to help pay co-pays and essential expenses. If the state offers an HSA/High Deductible plan, OPEA could possibly support this offered as a choice with current plan options and no cut to the benefit allowance.
Government Modernization
In addition to health insurance, the two other issues discussed in the House Government Modernization Committee are agency consolidation and agency boards and commissions. The bills are listed below:
HB 2140 (Steele and Bingman) consolidates the Department of Central Services, Office of Personnel Management, Merit Protection Commission, Oklahoma Department of Libraries, Employees Benefits Council, and the Oklahoma State and Education Employees Group Insurance Board. The bill mandates 15 percent savings with the consolidation.
OPEA is concerned with two major issues: First, the consolidation of MPC and OPM may affect the mission of MPC. However, the author has told us the Commission would remain in place. Much of this would have to be implemented in follow-up legislation and rules. Second, the mandate of 15 percent savings could affect the ability of the agencies to perform basic core functions required for government accountability and transparency.
HB 1304 (Derby) transfer the information technology assets and employees of all appropriated state agencies to the Information Services Division of the Office of State Finance (OSF) effective July 1, 2011. An amendment to the bill also requires all state agencies to use the Integrated Central Financial System operated by OSF.
While some efficiency may be gained by integrating state information technology, state agencies have diverse missions. Over the years, agencies have developed mission specific software to help deliver critical services. Transitioning systems such as child welfare, child support and nutrition programs for DHS, offender data for corrections, and other mission essential software could cause a disruption in service and loss of productivity.
HB 1208 (Martin) allows the governor to appoint all agency boards and commissions when he/she takes office.
Allowing the governor to replace all boards and commissions at the same time could result in the loss of institutional memory on agency governing boards.
SB 606 (Russell) allows the governor to appoint directors of agencies that are not in the Oklahoma Constitution when he/she takes office.
Allowing the governor to replace agency directors would concentrate power in the governor; however, this is how the federal government works.
Personnel
HB 1602 (Stiles) adds state employees whose job duties include direct or nursing care to the list of employees that may receive compensation for excess leave if staffing shortages prevent the employees from taking annual leave. Currently, fire suppression and corrections employees may be compensated if the staffing levels prohibit them from taking leave.
OPEA bill.
HB 1035 and HB 1207 (Murphey) and SB 541 (Sykes) requires state agencies to use the Trip Optimizer system for vehicles used by state employees when the travel exceeds 100 miles per day and the employee is not driving a state-owned or state-leased dedicated vehicle.
Some agencies have already established systems for optimizing travel dollars. A change would be expensive and disruptive. In addition, mandating a system or product in statute is unusual and ties agencies’ hands if the product becomes obsolete or does not work efficiently with an agency’s mission.
Privatization
HB 1359 (Rep. Ron Peters): Creates a 23-member Foster Care System Improvement Task Force. According to the current language, OPEA may appoint a member who works in child welfare to the committee.
SB 483 (Sen. Brian Crain) States legislative intent that agencies privatize services whenever feasible. This legislation also directs OKDHS to seek federal approval to facilitate the involvement of private providers and submit an annual plan regarding the utilization of privatization.
Currently, OKDHS has outsourced functions that are not part of the core mission of the agency. This legislation was requested by a contractor to expand profits at taxpayer expense.
SB 927 (Sen Cliff Branan): Creates a task force to study the sale, lease or private operation of all state-operated golf courses in five years.
HB 1363 (Rep. Ron Peters) would return the administration of the OKDHS ADvantage program to the Long Term Care Authority (LTCA). In 2007, DHS brought the program in-house because of cost overruns and mismanagement of funds by LTCA. This bill would cost about 60 state jobs.
OPEA opposes HB 1363 and is actively working to oppose this legislation. Currently, state employees are performing this function and saving administrative dollars formerly wasted by LTCA on high upper-level salaries and perks. These funds are being reallocated to services for seniors.
HB 1349 (Rep. Gus Blackwell): Directs the Department of Human Services to develop a plan to privatize foster care and related services by July 1, 2012. Dormant
HB 1046 (Rep. George Faught): Provides for the mutualization of CompSource. This bill allows classified employees to remain with the state, however they would become unclassified. Dormant
SB 702 (Sen. Cliff Aldridge): Requires the insurance commissioner to adopt a plan for the sale of CompSource no later than December 31, 2011. Dormant
SB 810 (Sen. Clark Jolley): Transfers the assets of CompSource to the Teachers Retirement System to help pay for the unfunded liability of the system. Dormant
SB 664 (Sen. Cliff Branan): Requires state-owned and operated parks to be sold, leased or transferred to private ownership within five years. Dormant
SB 642 (Sen. Cliff Branan): Requires an analysis to determine the value of GRDA’s property and facilities. (This bill has no mention of selling the assets.) Dormant
SB 811 (Sen. Clark Jolley): Transfers the assets of GRDA to the Oklahoma Public Retirement System to help pay for the unfunded liability of the system. Dormant
Posted on
Thu, March 10, 2011
by Trish Frazier