Today, Governor Brian Schweitzer announced a legislative proposal to fix Montana's unfunded pension liability without a tax increase. The legislative proposal would make Montana the first state in the nation to address its unfunded pension liability, currently estimated at over 3 billion over the next 30 years. Montana has maintained record budget surpluses for the last seven years, averaging $411 million cash balance during that period.
"Just like paying your mortgage, it is an incremental solution that will make our pension systems whole. We will be the first state in the union to fix our pensions, all without tax increases," said Schweitzer.
The legislation will address both the Public Employee Retirement System (PERS) and the Teacher Retirement System (TRS) by increasing the contribution from both employers and employees by 1% in addition to funding from natural resource development on state lands and contributions from both state and local governments.
"We have a three legged approach to address the projected shortfall. Everyone from the employee and employer, to the state and local governments has to share the burden," explained Governor Schweitzer.
TRS fix without a tax increase:
* $25 million from state land guarantee account from natural resource development;
* $14.7 million one-time-only contribution from employer;
* 1% increased employee contribution and benefit changes.
PRS fix without a tax increase:
* $18.1 million state contribution and additional local government contribution;
* 1% increased employer contribution;
* 1% increased employee contribution.
"We are generating record revenue from our state lands by developing our natural resources including coal, oil, gas, grazing, and timber sales. It makes sense to use the record revenues to pay off our liabilities," said Governor Schweitzer.
Montana has maintained record budget surpluses for the last seven years, averaging $411 million cash balance during that period.