Thursday, February 4, 2010

Retirement and Independent Entities Committee

The House Retirement and Independent Entities Committee met today and passed three bills through the committee with a favorable recommendation. The bills are H.B. 215 Amendments to the Public Employees’ Benefit and Insurance Program Act – Risk Pools, H.B.233 Retirement Office Amendments, and H.B.83 Sub 1 Public Employees Retirement – Spousal Election.

H.B. 215 Amends the Public Employee’s Benefit and Insurance Program Act risk pools for full-time enrollees at an institution of higher education from full time equivalent enrollment of less than 18,000. Currently it is less than 12,000 full time equivalent students.

H.B. 233 modifies the Utah State Retirement and Insurance Benefit Act by amending provisions related to appointment of board members, purchase of service credit, disability benefits, and termination of employment on retirement date. This is URS annual “clean up” bill, which intends on clarifying the statue in Title 49 – or the Utah State Retirement and Insurance Benefit Act. UPEA was originally concerned with the original bill and talked to Dan Anderson, URS’ attorney about amending the bill. The bill was amended in committee today.

H.B. 83 Sub 1 requires the Utah State Retirement Office to provide written notice (within 30 days of a change and at least 60 days prior to retirement) to a retiree’s spouse of the retirement allowance option made by the retiree under the Public Employees’ Contributory or Noncontributory Act.

Health and Human Services Appropriations Committee

House Democratic Caucus 2/2/10

UPEA staff attended the House Democratic Caucus on 2/2/10, where the House Democratic Caucus discussed various items, including HB 1- Education funding, the Ethics legislation, and various housekeeping items.

Much conversation surrounded the ethics bills that have been presented thus far, including increased financial disclosure, lowering gift limits, and limiting on uses of campaign funds.

Health and Human Services Appropriations Subcommittee 2/1/10

In the Health and Human Services Appropriations Subcommittee held on 2/1/10, the committee discussed several issue and budget briefs that had to do with the Departments of Health and Human Services. These issue and budget briefs are linked below.

Department of Health
Epidemiology and Laboratory Services
Health - Federal funds
Health - Intent Language follow up from prior year.
Health - Executive Director Operations
Health Systems Improvement
Workforce Financial Assistance
Community and Family Health Services
Local Health Departments
Health Nonlapsing Balances
Social Services Related Revenue Options
Substance Abuse and Mental Health
Division of Aging

The Utah Association of Counties also spoke to the impacts of potential cuts to the Health and Human Services line items described above. They are very concerned about the trickle down effect that this may have on local health departments and governments.

Wednesday, February 3, 2010

Overview of Utah's Retirement System

On Tuesday 2/2/2010 UPEA staff attended the Office of Legislative Research and General Counsel’s (OLRGC) “Bagels and Briefings – Overview of Utah’s Retirement System.”

Policy Analyst Ben Christensen went over the history and membership of the retirement system. Currently there are 155,667 employees in the Public Employee Noncontributory Retirement System (or the Big System), of which 52% include public and higher education employees, 20% include state employees, 27% include counties and local districts. Christensen also discussed the retirement allowance formula of years of service multiplied by 2% and the average of an employee’s 3 highest salaries. Lastly Christensen noted how the financial losses of 2008 affected the retirement system as a whole.

Next fiscal analyst Danny Schofield noted how the URS Retirement Board asked for a 2.1% contribution rate increase for the public employees contributory and noncontributory systems. According to the URS Retirement Board, if the contribution rate increase is funded, the retirement system will remain actuarially sound. In addition, URS annually expects at least a 7.75% investment return. In 2009, URS received a 13% return on investments. Schofield also spoke about the $23 million PEHP increase for FY 2011.

Lastly Darin Underwood from the Auditor General’s Office discussed the Reemployed Retiree Audit, presented to the Audit Subcommittee and Retirement and Independent Entities Committee November 2009.

UPEA is at the forefront of the retirement discussion and will continue to present arguments and information on how URS is still the best funded retirement system in the country.

House Republican Caucus Lunch

House Republican Caucus 2/2/2010

Speaker Dave Clark spoke on his Health System Reform Amendments Bill (which is still being written). He noted that the bill intends to:

“Increase Transparency” –
· Instructs the Utah Insurance commissioner to develop a method so that health insurer’s claims can be compared.

“Equalizes the market” –
· Bill is going to optimize health insurance choice for Utah businesses and their employees.
· Equalizing the defined benefit and defined contribution, so each market does not skew the other market unfairly.

“Allows employers coverage flexibility” –
· Employers will be able to choose either defined benefit or defined contribution plans inside the Exchange.
· Within the Exchange there will be a premium aggregator with expanded employee choice.
· The defined benefit plans in the Exchange, will not be able outside the Exchange in the regular insurance market.

“Makes health care costs controllable and predictable for Utah businesses and gives employees expanded coverage option and more control over their health care dollars” –
Expands the defined contribution market and how both employers and employees can pay for their health insurance within the Exchange.

UPEA is tracking how Health Systems Reform is being brought about in the small employer market, as Speaker Clark’s vision includes expanding the Utah Health Exchange to the large employer market in 1-2 years.

Monday, February 1, 2010

Appropriation Reviews

Commerce and Workforce Services Appropriations Subcommittee 1/27/2010

Budget Presentation Utah State Office of Rehabilitation
· The agency is not requesting any money. Executive Appropriations has asked for a 4% ongoing reduction. USOR is funded by the Uniform School Fund and Federal Funds.
· The Center for Public Policy presented information on the economic impact of services provided by USOR. Every $1.00 USOR spends on providing services its citizen clients the state receives back $5.64 through income taxes.
· Those who acquire services through USOR get higher wages. Since September 30, 2009 USOR has helped 3,116 people find employment and stay employed for at least 90 days.
· The public commented and asked that the subcommittee not eliminate night and weekend services provided at the Sorenson Center.

Budget Presentation Department of Financial Institutions
· This department currently regulates 109 financial institutions throughout the state – including credit unions, banks, trusts, payday lenders, etc.
· In 2009, the department eliminated 4 vacant positions.
· The agency runs on $5.9 million and is totally funded through the fees that go into the general restricted account. They do not rely on any money from the General Fund.
· 2009 was the first year that the department’s unused funds were not placed back into the general restricted account, but into the general fund, which resulted in the department to eliminate 4 vacant positions. Every year prior, the unused money always has returned to the general restricted account. If money continues to be taken out of the restricted account, the fees would have to be increased to cover their budget and that would require legislative action as the fees are in statue.

Budget Presentation Public Service Commission
This agency regulates the utility companies ensuring that they are charging reasonably priced utilities.
This agency does not receive any money from the General Fund. Their budget is entirely covered from a public utility fee of 1% of their revenues.
The Commission is not asking for any increases in their budget for the rest of FY 2010 or FY 2011, as their budget and number of employees has been the same since 1994.

Commerce and Workforce Services Appropriations Subcommittee 1/28/2010 – CANCELLED – Next Meeting will be held on Monday February 1, 2010.

The Department of Natural Resources Appropriations Committee reprioritized the budget list for FY 2010. Below is the updated budget list. The employee furloughs have already taken place.
Natural Resources Appropriations Subcommittee
Proposed 4% One‐Time Budget Reductions, FY 2010
Final
Jan. 20, 2010
Rank Agency Division Item Reduction
Running
Total
1 DNR DNR Admin One Day Furlough (8,100) (8,100) 0.0%
2 DNR Forestry One Day Furlough (8,700) (16,800) 0.0%
3 DNR Oil & Gas One Day Furlough (5,600) (22,400) 0.0%
4 DNR Wildlife One Day Furlough (32,900) (55,300) -0.1%
5 DNR Parks One Day Furlough (26,500) (81,800) -0.2%
6 DNR Geological Survey One Day Furlough (10,600) (92,400) -0.2%
7 DNR Water Resources One Day Furlough (8,900) (101,300) -0.2%
8 DNR Water Rights One Day Furlough (20,500) (121,800) -0.2%
9 PLPCO Public Lands Reductions (13,300) (135,100) -0.3%
10 Ag General Admin. Replacement with Dedicated Credits (135,000) (270,100) -0.5%
11 DNR Forestry Replacement with Restricted Funds (1,456,800) (1,726,900) -3.3%
12 Ag General Admin. Retirements (196,500) (1,923,400) -3.6%
13 Ag General Admin. Current Expense (114,600) (2,038,000) -3.9%
Office of the Legislative Fiscal Analyst 1/20/2010
14 Ag General Admin. Travel (in‐state) (50,000) (2,088,000) -3.9%
15 Ag State Fair Reductions (27,000) (2,115,000) -4.0%
(2,115,000)
Subcommittee Total General Fund Budget 52,874,800


House Democratic Caucus
On 1/28/10 the Public Employee Retirement Coalition (UPEA, UEA, USEA, and FOP) had the opportunity to present their views on the proposed retirement changes to the House Democratic Caucus. Each group highlighted the bills that are currently being presented, the effects of such bills, and that the coalition would like to see the issue reviewed in an interim study prior to taking any action.

UPEA provided talking points, historical information regarding contribution rates, and a recent Forbes article showing that Utah is in good shape to avoid financial failure due to pension funding.

Several of the legislators in the caucus expressed concern, stating that this issue will negatively impact the workforce. Many indicated that there is a need for public employees to be actively involved in the legislative process by contacting their legislators and educating the public.

UPEA indicated that they will update the legislators on the progress of the campaign, and again encourages all public employees to contact their legislators.

Capital Facilities and Governmental Operations Appropriations Subcommittee

On 1/28/10, UPEA attended the Capital Facilities and Governmental Operations Appropriations Subcommittee. The Legislative Auditor General’s Office presented “A Performance Audit of the Department of Technology Services” to the committee. The auditor stated that they are suggesting several efficiencies that can be found in the department and highlighted some recommendations that would help DTS better manage IT resources, develop a better strategic plan, and enhance the oversight and accountability of the department.

The DTS Executive Director, Stephen Fletcher, seemed sincerely grateful for the audit, as it helps to have another set of eyes to help them find a better way to move forward. He indicated that they have begun to implement several of the recommendations and have plans in place to continue working toward a more efficient service oriented model.

Fletcher gave a few examples of how they have been able to reach those efficiencies, including: eliminating 134 jobs through managed attrition, consolidating servers, and improving measurement of service levels. Through the positive recommendations given, DTS has been able to strengthen its processes and continues to look for new initiatives to find efficiencies.

Health and Human Services Appropriations Subcommittee
UPEA attended the Health and Human Services Appropriations Subcommittee on 1/28/10. In the meeting the Department of Health presented the changes that they have implemented through a reorganization of structure. The reorganization that took place last year consolidated 4 divisions into 3, and also looks to save the department close to $400,000 in ongoing funds, by consolidating high level positions.

The committee also discussed ways that the state could save money on Medicaid expenses. Michael Hales, Deputy Director of the Department of Health, indicated that they have implemented several changes based on an audit report that was completed last year.

Representative Dougall asked if the department could outsource some of the Medicaid administration to private companies. Hales indicated that some outsourcing has already been done through Healthy U and Molina Health. However, they are willing to look at alternatives depending on the scale of the

Thursday, January 28, 2010

Appropriation Subcommittee

HHS Appropriation Subcommittee 1/27/10

The Health and Human Services Appropriation Subcommittee met on 1/27/10. In the meeting they briefly discussed the Base Budget bills that will be submitted in both the House and Senate. There were a couple of changes that were recognized and added to the Base Budget priority list for the subcommittee. The committee added 3 items to the list for the Department of Health. The 3 items are related to the FY2011 budget recommendations listed last on the following link.
FY 2011 Base Budget Recommendations

The committee was also presented with the following reports that were specific to the Department of Health.

Health Care Financing
SB 87 Follow Up
Federal Disallowance
Children’s Health Insurance Program
Medicaid Mandatory Services
Medicaid Optional Services
Medicaid Providers: A Snapshot
UPEA is committed to tracking the State Budget and will continue to provide critical updates as they are received.

Health and Human Services Appropriations Subcommittee
1/20/10

The Health and Human Services Appropriations Subcommittee met to discuss the FY10 budget on 20 January, 2010. The Legislative Analysts Office put forward their proposals, using the 3% cut that the Departments of Health and Human Services have already implemented in accordance with Governor Herbert’s Executive Order. The recommendations that Legislative staff put forward can be found online, including the “Reductions Already Made”, “Base Budget Recommendations – Staff Proposal”, and “Optional Reductions”.

Legislative staff is proposing that DHS extend the hiring freeze to save more money, target all programs to take a 0.75% budget reduction – so as to spread the cuts equally across the board, and tap into the Disabilities Trust Fund to make up the $10 million reduction that is needed to amount to the required 4%. Representative Powell, suggested using more money from the Disability Trust Fund to remove DSPD services from the 0.75% cut – keeping their funding in tact. The committee agreed to those changes and removed DSPD from the backfill prioritization list.

The Analysts Office is recommending cuts that the Department of Health agrees with. However, prioritization was the difference in the recommendations given. Dr. Sundwall indicated that the reorganization is a large contributor to the savings found in DOH. He also stated that the Medicaid Restricted Fund account may be a reasonable option to plug the gaps that are found in the FY2010 budget, as the committee is requesting cutting one-time funds. Despite the recommendations made by Dr. Sundwall, the HHS Appropriations Committee decided to implement the recommendations made by the Legislative Analysts office.

The overwhelming hope of the committee was that the Executive Appropriations Committee would backfill many of the recommended reductions to the departments, rather than having to rely on such drastic cuts to critical programs and services.

Tuesday, January 26, 2010

Very Important Links

Here are links to the retirement bills and links to the committees that should be hearing the bills:

Retirement Eligibility Modifications
http://le.utah.gov/~2010/htmdoc/sbillhtm/sb0042.htm


Post-Retirement Employment Amendments
http://le.utah.gov/~2010/htmdoc/sbillhtm/sb0043.htm

Supplemental Benefit Amendments for Non-Contributory Public Employees
http://le.utah.gov/~2010/htmdoc/sbillhtm/sb0094.htm

Senate Retirement and Independent Entities Committee
http://www.le.state.ut.us/asp/interim/Commit.asp?Year=2010&Com=SSTRIE

House Retirement and Independent Entities Committee
http://www.le.state.ut.us/asp/interim/Commit.asp?Year=2010&Com=HSTRIE