TRA Update. The TRA fix was pulled out of the pension bill on Thursday, but that doesn't mean it is dead by any stretch of the imagination. Chief author Senator Julie Rosen moved to take the provision out of the omnibus pension bill in the Senate Finance Committee with the intent of working on a solution with Senator Sandy Pappas and attaching that solution to the omnibus pension bill on the Senate floor early in the week. The provision in the Senate bill called for an increased employee contribution in addition to an increased employer contribution and a permanent downward adjustment in the COLA for TRA pensions. The recommendation brought forward by TRA had no increase in the employee contribution and a five-year reduction in the COLA after which it would go up again. One thing to watch on this issue is where the money will come from. There is concern that the employer share would come from the E-12 target and could possibly impinge on the ability to increase the basic formula any further than it is in the current legislative package (1.5% per year). The Governor did have $69 million over the biennium to cover a portion of the increased employer share along with a 2% increase in the basic formula over the next two years, but it's important to remember he made those recommendations within a $700 million-plus budget target and we likely won't reach that level of spending for E-12 in the final budget negotiations. So,
There Will Be Rumors! The next week with be a rumor-o-rama and in that spirit, let's go back to the 1980s and listen to that awesome hit by Banarama "I Heard a Rumor." What a song! Rest assured, I will keep you in my circle of trust as the rumors began to bounce around.