Vermont Business Magazine Campaign for Vermont (CFV) has long been an advocate for pension reform. In a new report, the CFV said in a statement that after nearly a decade of obstinacy, "to our surprise, this year the legislature took the first steps towards meaningful action. While they passed on addressing benefits in the 2021 legislative session, they did set aside pre-funding for pensions and created a task force to look at benefits and bring back recommendations this Fall. We fully expect that the legislature will pass meaningful pension reform early in 2022 that balances our commitment to public employees and the liability for taxpayers. This is a critical balance to strike."
"CFV has been committed to government transparency, ethics, and open government officials. In this light, we were curious what conflicts of interest legislators might have when it comes to pensions and how those conflicts might impact a legislator’s opinion or voting preference on a pension bill. The bill passed this year does allow for several legislators to serve on the summer task force and we are hoping this work will shed some light on who should and should not serve in that capacity.
"In response to these questions, CFV conducted research on all 180 legislators, digging through legislative bios, candidate websites, financial disclosure forms, and campaign finance filings. We discovered that nearly one in every three legislators have some sort of conflict when it comes to Vermont’s public pension systems, however, in the Senate that number rose to one in two. In addition to not serving on the task force, some legislators also have conflicts great enough that should preclude them from voting."
Key Findings:
1. We found that 55 legislators had some sort of potential conflict. That is nearly 1 in every 3 people serving in the legislature. Most of these conflicts were either large campaign donations, active employment for the legislator/spouse in a public school or state government, or the legislator/spouse was receiving pension benefits from the state employee or teacher pension funds.
2. The distribution of these conflicts is more concerning than the actual number. Fifteen members of the Senate had some level of conflict, which is a full half of that legislative body.
3. The NEA and VSEA donated $31,672 to legislators over the past two years.
4. Key legislators on committees that deal with pensions have potential conflicts of interest.
a. Mary Hooper (Chair of the House Appropriations Committee) received over $1500 in
campaign contributions from the NEA and VSEA. And her husband is a retired state
employee receiving pension benefits.
b. Jane Kitchel (Chair of the Senate Appropriations Committee) did not receive any
campaign contributions but is a retired state employee and is receiving pension
benefits.
c. Ann Cummings (Chair of the Senate Finance Committee) received $780 dollars from the
NEA in October of 2020.
d. Mark MacDonald (Vice Chair of the Senate Finance Committee) received over $1500
from the NEA and he is a retired teacher receiving pension benefits.
e. Anthony Pollina (Vice Chair of the Senate Government Operations Committee) received
$780 from the NEA.
CFV Recommendations:
Determining how much influence household income and campaign contributions will have on how a legislator approaches or votes on an issue is a difficult thing to assess and it will vary greatly from person to person. For this reason, we would prefer to error on the side of caution, however there are practical limitations to this as well. We can’t, for example, reasonably expect half of the Senate to recuse themselves because they might have a conflict of interest.
To try to address some of these issues, we have broken our recommendations into two distinct sets: one to address the pension task force membership, and a second to address voting conflicts when a pension benefits bill comes to the floor.
For the pension task force we recommend selecting legislators without any potential conflicts where at all possible. This includes legislators who themselves or their spouse is an active state employee or public school teacher or they have received campaign contributions from the NEA, VSEA, or other state employee or teachers union. The one exception we might make to this is for retired state employees or teachers with extensive human resources or financial expertise.
We expect this pension task force to come back to the legislature in January with recommendations for benefit changes. When it comes to voting on a bill that contains benefits for state employees and teachers, the most immediate conflict is legislators who themselves are an active state employee or teacher, or whose spouse or domestic partner are an active state employee or teacher. This is because the types of benefit changes being contemplated have the greatest potential to impact active employees directly. This group of legislators should recuse themselves when pension benefit bills come up for vote.
The second tier of voting conflicts is legislators who have received campaign contributions from unions that represent groups covered under the public pension plans we are talking about. This is difficult because ideally we would say that any campaign donation has the potential to create a conflict but because so many legislators have received donations from unions we would accept a donation threshold instead as a trigger for recusal. In light of this, we recommend any legislator who has received $1,000 or more collectively in the current campaign cycle (2020-2021) from unions representing employees covered under Vermont’s public pension plans recuse themselves.
This does not preclude legislators who have received less than that from recusing themselves if they feel the donations represent an undue influence or they are concerned about the appearance of impropriety. In fact, we would encourage legislators to reach out to their respective ethics panels in the House and Senate if they are worried they might have a conflict in this area.
The third tier of potential conflicts is with legislators who themselves or whose spouse/domestic partner is a retired state employee or teacher and is receiving pension benefits. We believe this group has less of a conflict than the other two groups because none of the plans that have been proposed impact existing state employees directly. However, even if it wouldn’t change their benefits, existing retirees may have sympathy for current employees situation or they may have friends that haven’t retired yet that could be impacted. Still, we don’t feel the potential for these conflicts rises to the level requiring recusal unless an individual legislator deems it necessary. Because each person’s situation is different, we would encourage legislators to reach out to their respective ethics panels if they think they might have an issue.
The full results of Campaign for Vermont’s research and a full list of recommendations can be found at CampaignForVermont.org/ethics.
Source: Campaign for Vermont 6.15.2021 Montpelier
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