The West Virginia Senate has agreed to help cities and towns with their police and firefighter pension funds, partly by reversing a recent tax break on consumer insurance costs.
The state would restore a 1 percent surcharge on most policies, which had been cut nearly in half in 2005, under a bill advanced 32-7 Tuesday to the House.
Besides devoting the revenue to these municipal programs, the measure would also allow them to increase employee contribution rates, expand investment options and tighten plan oversight.
These local funds face gaps between promised benefits and on-hand assets that total $660 million. Officials from West Virginia’s largest cities, Charleston and Huntington, say these unfunded liabilities threaten to bankrupt them.
Undoing the 2005 break would add $3 to the average premium, and generate an estimated $15 million a year, supporters say.
Tuesday’s dissenting senators objected to what they saw as an unwarranted bailout.
“This is not our responsibility,” said Sen. Frank Deem, R-Wood. “This is the cities’ responsibility.”
The bill’s backers cited the woeful funding levels of several of these municipal plans, and invoked the specter of a state takeover of a bankrupt city or town.
“We’re giving them a life raft, that’s true, but I don’t know what else we can do,” Senate Judiciary Chairman Jeff Kessler, D-Marshall, said before the vote.
George J Charnie Jr says: 
Grit says: 
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