There has been a ton of rumors going around about bills the State Legislators are considering this session, that directly affect fire fighters. The PFFW has been keeping tabs on all bills and language that may affect fire fighters. The following is an update that was put out by the PFFW State President, Mahlon Mitchell, on what is going on politically in the state. This should give everyone a good idea of what is out there and what is not. Rest assured that the PFFW is constantly keeping an eye out for your interests at the state and national level and we will keep everyone informed whenever we hear anything. Until then, if you hear about something that may be coming down the pike please call me and let me know what it is and where you heard it. I can then track it down and see if it is true or not. I hope this helps answer any questions you may have and clear up any worries you may have. If you have any questions feel free to call.
TO: All Local Leadership
FROM: State President Mahlon Mitchell
Date: March 27, 2013
RE: Legislative Update
The last couple of weeks have been hectic here in Madison! We have been either analyzing the Governor’s biannual budget bill or keeping track of legislation that has been introduced or is about to be introduced. I will first give you an update on what is in the Governor’s budget and then describe pending and proposed legislation.
State Budget Bill (AB-40) – The bill contains a number of provisions that might impact fire fighters. Public hearing on the budget will begin next week. That will be followed by the Joint Committee on Finance voting on the budget, section by section. Votes by the full Assembly and Senate are not expected until the Governor signs the bill in late June or early July. Below are the provisions on which we are lobbying or monitoring closely:
§ Shared Revenue – The budget appropriates about the same amount of Shared Revenue for the next two years as has been appropriated this past year. The program now provides nearly $694 million annually; it will increase to $695 million for each of next two years. That is an increase of 0.1%, so don’t expect to see any real change.
§ Levy Limits – No change from current law. Levy can only go up if there is growth.
§ Levy Limits-Use of Carry Over Unused Funds - Not all municipalities levy to the maximum amount allowed under current law. There has been question whether a municipality can use their “unused levy” in future years? The budget makes permanent the current law that lets you carry it forward, but there needs to be a three-fourths vote of local governing body to do that.
§ Residency Requirements – The budget eliminates the authority of a public employer to place any type of residency requirement on its employees. This applies to all municipalities, not just Milwaukee. The new limit takes place once the budget is signed into law. If there is an existing contract, that contract language is effective until the contract expires.
§ Double Dipping - Two changes are proposed to current law. There needs to be a break in service before going back to work for a public employer (state or local). Current law is 30 days; the proposed time is 75 days. The other new provision places a limit on how much time you can work while still collecting your annuity. If you are working less than two-thirds time you can keep getting your annuity. If you work over two-thirds time, you lose your annuity until you “retire” again. Then it starts over with the additional work credited.
Post Retirement Health Care Benefits (AB-23, SB-48) - This bill requires that if an employer offers post employment benefits like health care, they will need to invest funds at the hire of a new employee. Currently, an employer pays for those benefits on a continuing basis once an employee retires.
The PFFW, along with the League of Municipalities, have registered their opposition to the bills. This new policy might be defensible but until either the state increases Shared Revenue or lifts Levy Limits, a city cannot afford to keep the old system and pay for the new one. As an example, the City of Milwaukee now pays on a continuing basis. This would stay in place for all the current employees. However, for any new employees, they will need to set aside funds. Milwaukee figures it would cost them $1.2 million for the first year, $2.4 million second year, and more each year after that. If Milwaukee gets no more Shared Revenue and has the Levy frozen, how do they pay for this additional cost? Money has to come from somewhere! Hearings have been held in both houses but neither bill has been scheduled for a committee vote yet.
Increase Retirement Age (LRB 0513/2) - Rep. Duey Stroebel (R-Port Washington), CoChair of the Joint Survey Committee on Retirement Systems, is authoring a bill that would increase the retirement age for all state and local government employees by two years. For fire and police, that would increase the age from 50 to 52. This new requirement would only apply to those employees now under 40 years of age.
Bill has not yet been introduced so we do not know how many sponsors there might be. Bills that change the retirement system have numerous steps that must be followed before the bill becomes law. One of the first things that will be needed is an actuarial study. That only happens if there are votes on the Joint Survey Committee to direct that a study be done.
The PFFW is following this issue closely and once we see who and how many sponsors there are, we can then plan our strategy.
Determining Amount of Annuity (LRB1912/2) - Rep. Duey Stroebel has another bill that is looking for sponsors. This bill would change the formula for determining the size of one’s annuity. The current formula averages the highest three years for one of the factors. This proposed bill changes that to focus on the average of the five highest years.
This bill has not yet been introduced either. Again once it is, we will see what kind of support it has. This bill too has to have an actuarial study done before it can be acted on by the Retirement Committee. One thing is sure and that is unless your year 4 and year 5 were the same or larger than your highest three years, this will result in a smaller annuity for everyone. The PFFW is watching this closely and will take appropriate lobby action once we identify the sponsors.
The PFFW is not alone in our lobbying efforts. We are helping to coordinate a coalition, called the Public Safety Coalition. It is composed of the PFFW, the WPPA, the fire chiefs association, police chiefs association, the volunteer fire fighters association as well as Milwaukee fire fighters and Milwaukee police association. We meet regularly to share information and views as well as coordinate lobbying efforts where our interests are mutual.
Representatives of the PFFW attended the annual IAFF Legislative Conference in Washington, D.C. last week. In addition to State Secretary Treasurer Steve Wilding and myself, the PFFW Board was represented by Matt Simpson and Justin Pluess and PFFW lobbyist Joe Strohl. Janesville Local 580 was represented by Joe Flister.
We met with U.S. Senator Tammy Baldwn and a staff person for U.S .Senator Ron Johnson. On the House side, we met with Representatives Paul Ryan, Mark Pocan, Shawn Duffy, Gwen Moore, Tom Petri, and Ron Kind. We also met with a staff person for Representative Reid Ribble. Below are the three important issues we discussed with our federal representatives:
1. FIRE and SAFER Grants - With the continuing debate over spending and taxing in Washington, grants for these two important programs are always in question. It is too early in the federal budget process to know the future of these programs for sure.
2. Social Security for Fire Fighters - It is clear to all that one of the big budget items the Congress and President are trying to deal with is the reform of Social Security. Though no one is really talking openly about requiring fire fighters to be covered by Social Security, the fear is that in some late –night compromise they could add the fire fighters. We did not detect that any of the Wisconsin delegation was suggesting such a change.
3. Taxation of Health Care Benefits - Congressman Paul Ryan is a strong supporter of changing the tax code so that anyone that currently has employer provided health insurance would have the value of that treated as income and it would be subject to the federal income tax. Rep. Ryan tried to suggest that we would be able to then take the value of the insurance as a deduction and in the end we would be better off. We left the meeting doubtful that that would be the case. It is too early to know what might happen with this Ryan proposal but we will work closely with the IAFF to fight any such effort.
As you can see, it has been an incredibly busy few weeks. We will continue to work on your behalf and will keep you apprised of important developments. If you have any questions in the meantime, please let us know.
