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Lt. Gov. Delbert Hosemann calls state pension problems ‘the major issue’ of 2024 legislative session

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Lt. Gov. Delbert Hosemann calls state pension problems ‘the major issue’ of 2024 legislative session

Lt. Gov. Delbert Hosemann said that deciding how to ensure the long-term financial solvency of the massive Mississippi Public Employees Retirement System is “the major issue” facing lawmakers during the current legislative .

PERS provides pension benefits for more than 360,000 current and former government employees in Mississippi, school district employees and higher education and community college staff.

The system has experienced financial problems for years that many argue have gone largely unaddressed. It has about $32 in assets to pay its retirees, but it is about $25 billion in long-term debt. It has a ratio of about 56%, meaning the system has just 56% of the revenue needed to cover its liabilities over a 30-year period.

PERS leaders this year are asking the Legislature for an infusion of cash — which lawmakers traditionally do not on an annual basis — to help offset the system’s uncertain financial future.

Hosemann recently said until the issues facing PERS are resolved, the Legislature cannot commit on how much to provide in funding for state agencies, schools and other programs.

“We are going to pay the retirees,” Hosemann said.

House Speaker Jason White, R-West, has also talked of the importance of addressing PERS.

“I think there has been a commitment at least around the coffee pot that we (legislators) want to fix this long term,” White said before the session began. “… For myself, I would say we are not going to just increase it (the amount of government money put into the plan) 5%, 10% and hope it gets better.”

While Hosemann and many legislative leaders appear to be locked in on PERS, the problems have not been addressed by Gov. Tate Reeves. Reeves, in the first year of his final term as governor, did not mention PERS in his recently released budget proposal. At a time when legislative leaders and local government officials are grappling with how to fund PERS, Reeves instead touted his plan to eliminate the state income tax, which would, if passed, do away with one-third of the state’s current annual general fund revenue.

Fixing the pension program, many leaders believe, will take a significant infusion of funds. Some proposed could place a significant strain on city and county governments, on school districts and state agencies that currently pay into the system unless the Legislature commits to appropriating an additional amount of money.

During a recent meeting with the Senate Finance Committee, Ray Higgins, the PERS executive director, did not provide a specific amount of money that he believes the Legislature needed to contribute to the program. Hosemann has spoken of the program possibly needing an additional $360 million annually.

“When it down to the long-term sustainability of PERS, we should either fund it, change it, or eventually we may risk it,” Higgins wrote in a letter to lawmakers. “Revenue must increase, expenses and liabilities should decrease, or both.”

The retirement system’s revenue to pay pension benefits is generated in the ways:

  • From employees contributing 9% of their salaries to PERS.
  • From employers or governmental entities contributing a sum equal to 17.4% of an employee’s paycheck to the program.
  • From investment income. Investment income is key since the employee/employer contributions are not enough to cover the monthly costs.

The average annual retirement income for retirees is about $26,900.

Multiple factors are contributing to the financial uncertainty in the system, including:

  • Recessions through the years that have impacted the investment earnings.
  • A shrinking governmental workforce and additional retirees.
  • Legislature-approved added benefits through the years, dating back to the 1990s — some of which were provided, some argue, without a revenue stream to pay for them.

Perhaps the most confusing and controversial change that placed stress on the system was the action by the 10-member board that governs PERS to change what is known as the assumed rate of return. Based on recommendations from actuaries, the board recently dropped the assumed rate of return from 7.5% to 7%, meaning that PERS’ investments will earn 7% instead of 7.5% annually. The change was made to paint what PERS officials said is a more accurate picture of the system’s financial outlook. But the lower assumed rate of return means the expectation is that the investment earnings will generate less money, thus causing more debt.

Sen. Daniel Sparks, R-Belmont, pointed out that at one point not too long ago the assumed rate of return was 8%. He said, optimistically, that each year the investment earnings exceed the assumed rate of returns means the system’s debt is decreased.

Still, the PERS board believes that strong investment earnings will not be enough to totally resolve the financial woes facing the system. The board plans to phase in a 5% increase in the employer contribution rate over a three-year period. There has been talk of phasing in a 10% increase in the employer contribution rate. The first 2% increase that will be enacted on July 1 will cost the state $60 million, not counting the cost for local and county governments. Under current law, the board has the authority to act on its own to increase the employer contribution rate, though the Legislature could change the law.

City and county officials have told legislators they cannot afford the increase.

Senate Appropriations Chair Briggs Hopson, R-Vicksburg, said he already is hearing from state agency directors about the issue.

“I guarantee they are coming to me saying whatever you do, give us enough money to pay for the PERS increase,” Hopson said. “ … Either we provide the money or they have to absorb it,” meaning they cannot provide raises or enact other programs that cost money.

Hosemann said such increases in the employer contribution would be “catastrophic” for the system since local governments would start hiring contract workers instead of full-time government employees who would be eligible for PERS pensions. That, Hosemann said, would further reduce the number of employees paying into the system.

Sen. Hob , D-Amory, pointed out that each time the Legislature privatizes a governmental function it reduces the number of state employees paying into the system.

Bryan also pointed out that years ago, a separate public retirement system for troopers faced financial difficulties. Bryan said in that instance, the Legislature passed a law to place a fee on traffic citations with the revenue earned from the fee directed to the retirement system.

Whether there is the legislative will to create a similar source of revenue dedicated to the much larger PERS system remains to be seen.

In the meantime, the Legislature is expected to act on a proposal by the PERS board to change the benefits for new governmental hires. The proposal includes eliminating the guaranteed 3% annual cost of living increase for new employees. Instead, under the proposal, new employees would get a cost of living increase when revenue is available and tied to the annual inflation rate instead of the automatic 3% cost of living increase each year. The proposal would not make any changes to the guaranteed 3% annual cost of living increase for current employees and retirees.

Both Hosemann and Hopson said they do not believe it is legal to reduce the benefits for current employees and retirees.

“I don’t think you can do that,” Hosemann said. “I am not going to do it.”

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

Mississippi Today

Mississippi Election 2024: What will be on Tuesday’s ballot?

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mississippitoday.org – Bobby Harrison – 2024-11-04 10:00:00

Mississippians will go to the polls on Tuesday, Nov. 5, to elect federal and state judicial posts and some local offices, such as for election commissioners and school board members.

Polls will be open from 7 a.m. to 7 p.m. on Tuesday. To find your polling place, use the secretary of state’s locator, or call your local county circuit clerk.

READ MORE: View the Mississippi sample ballot.

The following is a list of the candidates for federal and judicial posts with brief bios:

President

  • Kamala Harris, current vice president and Democratic nominee for president. Her running mate is Tim Walz.
  • Donald Trump, former president and current Republican nominee. His running mate is J.D. Vance.
  • Robert Kennedy Jr. remains on the ballot in Mississippi even though he has endorsed Trump. His running mate is Nicole Shanahan.
  • Jill Stein is the Green Party candidate. Her running mate is Rudolph Ware.
  • Five other candidates will be on the Mississippi ballot for president. For a complete list of presidential candidates, see the sample ballot.

U.S. Senate

  • Ty Pinkins is the Democratic nominee. He is a Rolling Fork native and attorney, representing, among other clients, those alleging unfair working conditions. He served 21 years in the U.S. Army, combat stints, other overseas deployment and posts in the White House,
  • Roger Wicker is the Republican incumbent senator. He resides in and has served in the U.S. Senate since late 2007 after first being appointed to fill a vacancy by then-Gov. Haley Barbour. He was elected to the post in 2008. He previously served in the U.S. House and as a state senator. He is an attorney and served in the United States Force.

House District 1

  • Dianne Black is the Democratic nominee. She is a small business owner in Olive Branch in DeSoto County.
  • Trent is the Republican incumbent. He was elected to the post in a special election in 2015. He previously served as a district attorney and before then as a prosecuting attorney for the city of Tupelo. He is a major general in the Mississippi Army National Guard.

House District 2

  • Bennie Thompson is the Democratic incumbent. He was first elected to the post in 1993. Before then, he served as a supervisor and as alderman and then as of Bolton.
  • Ronald Eller is the Republican nominee. He grew up in West Virginia and moved to central Mississippi after retiring from the military. He is a physician assistant and business owner.

House District 3

  • Michael Guest is the Republican incumbent and is unopposed.

House District 4

  • Mike Ezell is the Republican incumbent first being elected in 2022. He previously served as sheriff.
  • Craig Raybon is the Democratic nominee. Raybon is from and began a nonprofit “focused on helping out the community as a whole.”

Central District Supreme Court

  • Jenifer Branning currently serves as a member of the state Senate from Neshoba County.
  • Byron Carter is a Hinds County attorney and previously served as a law clerk for Supreme Court Justice Armis Hawkins.
  • James Kitchens is the incumbent. He has served on the state’s highest court since 2008.
  • Ceola James previously served on the Court of Appeals.
  • Abby Gale Robinson is a attorney. She previously was a commercial builder.

Southern District Supreme Court

  • Dawn Beam is the incumbent, having been first appointed in 2016 by then-Gov. Phil Bryant and later winning election to the post. She is a former chancellor for the Hattiesburg area.
  • David Sullivan is an attorney in and has been a municipal judge in D’Iberville since 2019. His father, Michael, previously served on the state Supreme Court.

Northern District Supreme Court seats

  • Robert Chamberlin of DeSoto County is unopposed.
  • James Maxwell of Lafayette County is unopposed.

Court of Appeals 5th District seat

  • Ian Baker is an assistant district attorney in Harrison County.
  • Jennifer Schloegel is a Chancery Court judge for Harrison, Hancock and Stone counties.
  • Amy St. Pe is a Municipal Court judge in Gautier.

Court of Appeals District 2

  • Incumbent Latrice Westbrooks is unopposed.

Court of Appeals District 3

  • Incumbent Jack Wilson is unopposed.                                                      

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 1750

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mississippitoday.org – Jerry Mitchell – 2024-11-04 07:00:00

Nov. 4, 1750

A painting of Jean Baptiste Point DuSable by Blackshear II. Credit: National Postal

Jean Baptiste Point DuSable, the “Father of Chicago,” was born. 

A man of African descent, he became the first known settler in the area that became the of Chicago. He married a Potawatomi woman, Kitiwaha (Catherine), and they had two

According to , the property included a log cabin with two barns, a horse-drawn mill, a bakehouse, a poultry house, a dairy, a smokehouse, a fenced garden and an orchard. At his trading post, DuSable served Native Americans, British and French explorers and spoke a number of languages. 

“He was actually by the British for being thought of as an American Patriot sympathizer,” Julius Jones, curator at the Chicago History Museum told WLS, but DuSable beat those charges. 

In Chicago , a school, street, museum, harbor, park and bridge bear his name. The place where he settled near the mouth of the Chicago is now a National Historic Landmark, part of the city’s Pioneer Court.

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

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Mississippi Today

Podcast: Mississippi’s top election official discusses Tuesday’s election

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mississippitoday.org – Geoff Pender, Bobby Harrison and Taylor Vance – 2024-11-04 06:30:00

Secretary of Michael Watson talks with Mississippi Today’s Geoff Pender, Bobby Harrison and Taylor Vance ahead of Tuesday’s election. He urges voters to remember sacrifices many have made to protect Americans’ rights and get to the polls, and he weighs in on whether a recent court ruling on absentee vote counting will impact this year’s elections.

READ MORE: As lawmakers look to cut taxes, Mississippi mayors and county leaders outline infrastructure needs

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

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