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Lawmakers ponder stripping state retirement system authority after board votes to raise rates

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Lawmakers ponder stripping state retirement system authority after board votes to raise rates

After Public Employees Retirement System Board of Trustees voted to require an additional $345 million annually from state and local governmental entities to fund the pension plan for their current and former employees, lawmakers are considering changes to the system’s authority.

The PERS board voted in December to increase the employer contribution rate, which is paid by state governmental agencies, school districts, county and city governmental entities. The current government contribution is 17.4% of the employees’ paycheck. The board voted to increase the rate to 22.4%.

Ron Higgins, PERS executive director, said the increase is needed to ensure the system is properly funded long-term.

The increase means state agencies will have to provide an additional $265 million toward their employees’ retirement, and local governmental entities will have to provide the rest. If more money is not appropriated by the Legislature to pay for the increase, the state agencies, university and community colleges and local school districts will have to make cuts in other areas so they can meet the mandate of the PERS Board. Local governmental entities also are required to provide the funds for the increase. Under current law, the Legislature cannot prevent the employer increase from going into effect.

A bill is pending in the Legislature, though — House Bill 605 — that could be used to give the Legislature final authority over whether to enact such an increase. Legislators have expressed frustration this year with the PERS board’s decision to increase the employer contribution rate.

When asked if he planned to bring the bill up for consideration before the full chamber, House Appropriations Chair John Read, R-Gautier, said, “All I can say is the bill is on the calendar. It is out there. It might need some more research.”

During a recent meeting, Senate Appropriations Chair Briggs Hopson, R-Vicksburg, said he understands the need to ensure the pension plan is properly funded, but also expressed concern that the actions of the PERS Board have “a direct impact on the state agencies and programs and opportunities for other people to have jobs and salaries and not get laid off and have cuts in a number of areas.”

Higgins, the executive director of PERS, said, “We just have to make sure it is fiduciary (and) that the system is funded property.” Higgins said the board postponed recommendations of its financial experts to increase the rates in earlier years because of the impact it would have on state and local budgets.

But he said under state law, the only option the board has to correct any funding deficiencies is to increase the employer contribution rate. It would take the Legislature changing the law to allow the board to increase the employee contribution rate or to change the level of benefits. The Legislature has the authority to take such action.

Higgins said more than 300,000 people are members of the system, meaning they are current retirees receiving benefits or are eligible to receive benefits in future years because of their public service. He said the average retiree receives an annual benefit of $26,000.

The planned increase in the employer benefit, which is not slated to go into effect until October, comes on the heels of a year when the system lost more than 8% on its investments. The board postponed recommended increases in the employer contribution rate the past two years in part because of investment earnings of 32.71% in 2020.

But Higgins said the rate increase is not because of investment earnings for any one year. He said it is being enacted because of the long-term prognosis for the system.

The system’s current full-funding ratio is about 61%, meaning it has the assets to pay the benefits of 61% of all the people in the system, ranging from the newest hires to those already retired. It is recommended that a state retirement system has a funding ratio of about 80%.

Hopson pointed out that the Mississippi Public Employee Retirement System employer contribution rate and the rate paid by employees (9% of their paycheck) is among the highest in the country. Higgins agreed, saying the national rate for employees in similar plansis about 6% of their paychecks, and for employers about 15%. The employer rate in Mississippi is currently 17.4%.

Lawmakers questioned whether the board is hiring competent experts to oversee the system and to make investments.

Higgins responded the system’s investment earnings are comparable to those in other states.

But he said the system is stressed by the fact that additional benefits were added for employers in the late 1990s and early 2000s without a method to pay for those benefits.

In addition, the current governmental workforce is shrinking while the number of retirees in the system is growing. Higgins said during the past 10 years, the governmental workforce is down by about 10%, while the number of retirees has increased by more than 25%.

“Every time we take a public service at the state or local level that was performed by a PERS contributing employee and privatize and give it to a someone who is not contributing, that ratio gets more out of whack,” said Sen. David Blount, D-Jackson.

Higgins said the board could provide recommendations on how to reduce the cost to the system. In the past some legislators have talked about temporarily suspending or altering the annual automatic 3% cost of living increase. But outcry from retirees who represent about 10% of the state’s population has stymied those efforts.

Higgins said another option would be to change the benefits for new hires. While that would help long term, Higgins said it would not be an immediate fix.

Sen. Jason Barrett, R-Brookhaven, asked if the board had made any recommendations for the 2023 Legislature to consider. Higgins said it has not, but added it is his understanding that there is not an appetite to address the issue during an election year. But he said the board could provide recommendation.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi Today

On this day in 1961

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mississippitoday.org – Jerry Mitchell – 2024-11-22 07:00:00

Nov. 22, 1961

Credit: Courtesy: Georgia Tourism & Travel

Five Black students, made up of NAACP Youth Council members and two SNCC volunteers from Albany State College, were arrested after entering the white waiting room of the Trailways station in Albany, Georgia. 

The council members bonded out of jail, but the SNCC volunteers, Bertha Gober and Blanton Hall declined bail and “chose to remain in jail over the holidays to dramatize their demand for justice,” according to SNCC Digital Gateway. The president of Albany State College expelled them. 

Gober became one of SNCC’s Freedom Singers and wrote the song, “We’ll Never Turn Back,” after the 1961 killing of Herbert Lee in Mississippi. The tune became SNCC’s anthem. 

After her release from jail, Gober joined other students, and police arrested her and other demonstrators. Back in the same jail, she sang to the police chief and mayor to open the cells, “I hear God’s children praying in jail, ‘Freedom, freedom, freedom.’” 

Albany State suspended another student, Bernice Reagon, after she joined SNCC. She poured herself into the civil rights movement and later formed the Grammy-nominated a cappella group Sweet Honey in the Rock to educate and empower the audience and community. 

“When I opened my mouth and began to sing, there was a force and power within myself I had never heard before,” a power she said she did not know she had. 

Other members of the Freedom Singers included Cordell Reagon, Bernice Johnson, Dorothy Vallis, Rutha Harris, Bernard Lafayette and Charles Neblett. On the third anniversary of the sit-in movement in 1963, they performed at Carnegie Hall. 

“This is a singing movement,” SNCC leader James Forman told a reporter. “The songs help. Without them, it would be ugly.” 

Today, the Albany Civil Rights Institute houses exhibits on these protesters, Martin Luther King Jr. and others who joined the Albany Movement.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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IHL deletes the word ‘diversity’ from its policies

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mississippitoday.org – Molly Minta – 2024-11-21 14:32:00

The governing board of Mississippi’s public universities voted Thursday to delete the word “diversity” from several policies, including a requirement that the board evaluate university presidents on campus diversity outcomes.

Though the Legislature has not passed a bill targeting diversity, equity and inclusion initiatives in higher education, the Institutions of Higher Learning Board of Trustees approved the changes “in order to ensure continued compliance with state and federal law,” according to the board book

The move comes on the heels of the re-election of former President Donald Trump and after several universities in Mississippi have renamed their diversity offices. Earlier this year, the IHL board approved changes to the University of Southern Mississippi’s mission and vision statements that removed the words “diverse” and “inclusiveness.”

In an email, John Sewell, IHL’s communications director, did not respond to several questions about the policy changes but wrote that the board’s goal was to “reinforce our commitment to ensuring students have access to the best education possible, supported by world-class faculty and staff.”

“The end goal is to support all students, and to make sure they graduate fully prepared to enter the workforce, hopefully in Mississippi,” Sewell added.

On Thursday, trustees approved the changes without discussion after a first reading by Harold Pizzetta, the associate commissioner for legal affairs and risk management. But Sewell wrote in an email that the board discussed the policy amendments in open session two months ago during its retreat in Meridian, more than an hour away from the board’s normal meeting location in Jackson.

IHL often uses these retreats, which unlike its regular board meetings aren’t livestreamed and are rarely attended by members of the public outside of the occasional reporter, to discuss potentially controversial policy changes.

Last year, the board had a spirited discussion about a policy change that would have increased its oversight of off-campus programs during its retreat at the White House Hotel in Biloxi. In 2022, during a retreat that also took place in Meridian, trustees discussed changing the board’s tenure policies. At both retreats, a Mississippi Today reporter was the only member of the public to witness the discussions.

The changes to IHL’s diversity policy echo a shift, particularly at colleges and universities in conservative states, from concepts like diversity in favor of “access” and “opportunity.” In higher education, the term “diversity, equity and inclusion” has traditionally referred to a range of efforts to comply with civil rights laws and foster a sense of on-campus belonging among minority populations.

But in recent years, conservative politicians have contended that DEI programs are wasteful spending and racist. A bill to ban state funding for DEI in Mississippi died earlier this year, but at least 10 other states have passed laws seeking to end or restrict such initiatives at state agencies, including publicly funded universities, according to ABC News.

In Mississippi, the word “diversity” first appeared in IHL’s policies in 1998. The diversity statement was adopted in 2005 and amended in 2013. 

The board’s vote on Thursday turned the diversity statement, which was deleted in its entirety, into a “statement on higher education access and success” according to the board book. 

“One of the strengths of Mississippi is the diversity of its people,” the diversity statement read. “This diversity enriches higher education and contributes to the capacity that our students develop for living in a multicultural and interdependent world.”

Significantly, the diversity statement required the IHL board to evaluate the university presidents and the higher learning commissioner on diversity outcomes. 

The statement also included system-wide goals — some of which it is unclear if the board has achieved — to increase the enrollment and graduation rates of minority students, employ more underrepresented faculty, staff and administrators, and increase the use of minority-owned contractors and vendors. 

Sewell did not respond to questions about if IHL has met those goals or if the board will continue to evaluate presidents on diversity outcomes.

In the new policy, those requirements were replaced with two paragraphs about the importance of respectful dialogue on campus and access to higher education for all Mississippians. 

“We encourage all members of the academic community to engage in respectful, meaningful discourse with the aim of promoting critical thinking in the pursuit of knowledge, a deeper understanding of the human condition, and the development of character,” the new policy reads. “All students should be supported in their educational journey through programming and services designed to have a positive effect on their individual academic performance, retention, and graduation.” 

Also excised was a policy that listed common characteristics of universities in Mississippi, including “a commitment to ethnic and gender diversity,” among others. Another policy on institutional scholarships was also edited to remove a clause that required such programs to “promote diversity.” 

“IHL is committed to higher education access and success among all populations to assist the state of Mississippi in meeting its enrollment and degree completion goals, as well as building a highly-skilled workforce,” the institutional scholarship policy now reads. 

The board also approved a change that requires the universities to review their institutional mission statements on an annual basis.

A policy on “planning principles” will continue to include the word “diverse,” and a policy that states the presidential search advisory committees will “be representative in terms of diversity” was left unchanged.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Closed St. Dominic’s mental health beds to reopen in December under new management

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mississippitoday.org – Gwen Dilworth – 2024-11-21 13:54:00

The shuttered St. Dominic’s mental health unit will reopen under the management of a for-profit, Texas-based company next month. 

Oceans Behavioral Hospital Jackson, a 77-bed facility, will provide inpatient behavioral health services to adults and seniors and add intensive outpatient treatment services next year. 

“Jackson continuously ranks as one of the cities for our company that shows one of the greatest needs in terms of behavioral health,” Oceans Healthcare CEO Stuart Archer told Mississippi Today at a ribbon cutting ceremony at its location on St. Dominic’s campus Thursday. “…There’s been an outcry for high quality care.” 

St. Dominic’s 83-bed mental health unit closed suddenly in June 2023, citing “substantial financial challenges.”

Merit Health Central, which operates a 71-bed psychiatric health hospital unit in Jackson, sued Oceans in March, arguing that the new hospital violated the law by using a workaround to avoid a State Health Department requirement that the hospital spend at least 17% of its gross patient revenue on indigent and charity care.

Without a required threshold for this care, Merit Health Central will shoulder the burden of treating more non-paying patients, the hospital in South Jackson argued. 

The suit, which also names St. Dominic’s Hospital and the Mississippi Department of Health as defendants, awaits a ruling from Hinds County Chancery Court Judge Tametrice Hodges-Linzey next year. 

The complaint does not bar Oceans from moving forward with its plans to reopen, said Archer.

A hallway inside Oceans Behavioral Hospital in Jackson, Miss., is seen on Thursday, Nov. 21, 2024, during the facility’s grand opening. Credit: Eric Shelton/Mississippi Today

Oceans operates two other mental health facilities in Mississippi and over 30 other locations in Louisiana, Oklahoma and Texas. 

“Oceans is very important to the Coast, to Tupelo, and it’s important right here in this building. It’s part of the state of Mississippi’s response to making sure people receive adequate mental health care in Mississippi,” said Lt. Governor Delbert Hosemann at the Nov. 21 ribbon cutting.

Some community leaders have been critical of the facility. 

“Oceans plans to duplicate existing services available to insured patients while ignoring the underserved and indigent population in need,” wrote Hinds County Sheriff Tyree Jones in an Oct. 1 letter provided to Mississippi Today by Merit Health. 

Massachusetts-based Webster Equity Partners, a private-equity firm with a number of investments in health care, bought Oceans in 2022. St. Dominic’s is owned by Louisiana-based Catholic nonprofit Franciscan Missionaries of Our Lady Health System.

Oceans first filed a “certificate of need” application to reopen the St. Dominic’s mental health unit in October 2023. 

Mississippi’s certificate of need law requires medical facilities to receive approval from the state before opening a new health care center to demonstrate there is a need for its services. 

The Department of Health approved the application under the condition that the hospital spend at least 17% of its patient revenue on free or low-cost medical care for low-income individuals – far more than the two percent it proposed. 

Stuart Archer, CEO of Oceans Healthcare, speaks during the grand opening of Oceans Behavioral Hospital in Jackson, Miss., on Thursday, Nov. 21, 2024. Credit: Eric Shelton/Mississippi Today

Oceans projected in its application that the hospital’s profit would equal $2.6 million in its third year, and it would spend $341,103 on charity care.

Merit Health contested the conditional approval, arguing that because its mental health unit provides 22% charity care, Oceans providing less would have a “significant adverse effect” on Merit by diverting more patients without insurance or unable to pay for care to its beds. 

Oceans and St. Dominic’s also opposed the state’s charity care condition, arguing that 17% was an unreasonable figure. 

But before a public hearing could be held on the matter, Oceans and St. Dominic’s filed for a “change of ownership,” bypassing the certificate of need process entirely. The state approved the application 11 days later

Merit Health Central then sued Oceans, St. Dominic and the State Department of Health, seeking to nullify the change of ownership. 

“The (change of ownership) filing and DOH approval … are nothing more than an ‘end run’ around CON law,” wrote Merit Health in the complaint. 

Oceans, St. Dominic’s and the Mississippi Department of Health have filed motions to dismiss the case. 

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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