Retirement funding depends on follow-up
Capitol Report for dailies for week of June 10, 2007"
By Jim Campbell
OPA Capitol News Bureau
Legislation treating Oklahoma's sickly teacher retirement system is considered good medicine by a veteran analyst, in hope that an "escape clause" doesn't result in relapse.
Gov. Brad Henry signed a teacher retirement cleanup measure, House Bill 1092, in last week's final action on 2007 legislation. He held a public signing last month for primary provisions in Senate Bill 357.
SB 357 by Sens. Mike Mazzei, R-Tulsa, and Kenneth Corn, D-Poteau, phases in higher contributions from school districts, from 8.5 percent to 9.5 percent, through increased state appropriations.
Harold Sare, a retired Oklahoma State University department head and analyst for the Oklahoma Teacher Retirement System, said "it's a good bill, a step in the right direction."
"But there is an escape clause," he said, in an exemption for higher employer contributions if the Legislature does not keep its promise to reimburse them. 
"That's going to be the question," he said. "And if they should go from a defined benefit pension system to a defined contribution system it would go out the window."
Sare said there is sentiment among some legislators for a defined contribution program, similar to the 401(k) system in private industry, but "the negative experience of other states" has dampened enthusiasm for it.
The state contribution to the system is to start at $10 million this year, eventually reaching $30 million. The goal is to boost the funding level from a puny 49 percent now, third from the bottom nationally, to 80 percent by 2026.
Sare said he had worked for 12 years to get the state to appropriate to the system, but the idea had too little popularity among lawmakers until this year.  
He credited Mazzei with  "really pushing for this bill" while Henry and State Treasurer Scott Meacham worked to persuade lawmakers that the system's low rating is a huge bonding liability to the state. 
"It's been estimated to cost about $20 million a year," Sare said.
Mazzei and Corn pointed to that financial risk to state taxpayers at the time of Senate passage.
Meacham said the legislation is not the total solution to a hole of more than $7 billion in the system, but "a good start."
"Lawmakers must also step up and provide the funding that is required, now and in future years," he said.
Various taxes now provide about $200 million a year to cover some 200,000 teachers and retirees. SB 357 also says such dedicated revenue sources as the personal income tax, sales tax and use tax cannot be reduced by economic downturn or tax cuts.
Under HB 1092, universities would go from paying the current 7.05 percent to 8.75 percent in 2010, also dependent on adequate funding from the Legislature.
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A major reason a program helping small business owners and employees pay for health insurance has been so little used was addressed in a bill signed last week.
The program until now has been limited to small businesses with 50 or fewer workers who earned no more than 185 percent of the federal poverty level - about $38,000 for a family of four.
That amount as total family income, particularly in households with more than one wage earner, has created difficulties in qualifying.
House Bill 1225 by Rep. Chris Benge, R-Tulsa, and Sen. Johnnie Crutchfield, D-Ardmore, extends eligibility for Insure Oklahoma to businesses with up to 250 employees who can earn up to 250 percent of the poverty level.
The governor said "limited eligibility has proved a hindrance for many in the business community to participate."
Under the Oklahoma Employer/Employee Partnership for Insurance Coverage, the state pays 60 percent of the insurance costs, the employer pays 25 percent and the employee picks up the remaining 15 percent.
The state subsidy is funded by the Oklahoma Health Care Initiative created in a state question that raised the sales tax on tobacco.
When it began taking applications in November 2005, plans were to cover 50,000 to 70,000 individuals. But only a few more than 2,000 had signed up by this May.
Rep. Doug Cox, R-Grove, a physician, said HB 1225 and Senate Bill 424, which he authored with Sen. Tom Adelson, D-Tulsa, "will go a long way to enable these uninsured patients to have affordable access to insurance."
Cox said 34 percent of patients he sees in the Emergency Room today have no insurance of any kind and 29 percent will never pay a penny of their ER bill.
"The cost of caring for them will be cost-shifted to those of us who have insurance or pay cash," Cox said.
SB 424, signed by Henry at the same time, is the "All Kids Act" that increases Medicaid funding for children from 185 percent of the poverty level to 300 percent, the maximum federal level. It is expected to cover as many as 42,000 more children.
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Oklahoma's highest concentration of Indian casinos, in far northeast Oklahoma, may get competition from Kansas.
The Joplin (MO) Globe said Cherokee County, Kan., voted 70 percent to locate a large casino near the I-44 exit at roads to Baxter Springs and Galena.  Adjacent Ottawa County, Okla., now has10 casinos, and an eleventh is planned near Quapaw, about five miles from the border at Baxter Springs.
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