On Monday Governor Gregoire announced policy initiatives to further reduce the State’s fiscal footprint. She announced changes in two signficant areas: (1) Health Care and (2) Pension Plans for the 2011-13 biennium.
Health Care
Governor Gregoire’s policy initiative focuses on further changing Washington’s health care delivery system in order to allow for higher quality, more affordable care. To facilitate this, and consistent with her intent to reorganize state government to operate more effectively and efficiently, she proposed the following.
- Consolidate a majority of the state’s health care purchasing into a single agency
- Take advantage of opportunities provided under federal health care reform – the Affordable Care Act
- Move forward with work launched with the federal Center for Innovation to have Washington serve as a pilot in testing models that ramp up quality and tamp down costs.
Pensions
Governor Gregoire proposed the following actions to reduce future costs to employers and taxpayers while maintaining reasonable benefits for valued public employees and retirees.
- Reverse a 1995 law granting an annual cost of living increase in benefits regardless of inflation. The Legislature could still consider increases to these benefits, like they did pre-1995, but they would no longer happen automatically.
- Change the current system which allows workers to retire early without a corresponding reduction in their benefits for all new hires.
- Align state support for higher education retirement plans more closely with that provided for other state employers by capping the state’s contribution at 6%. Currently higher education retirement plans provide both a defined contribution amount and a supplemental guaranteed minimum benefit. The alternative would be to allow new higher education employees the option to participate in one of the state’s hybrid pension plans.
- End retire-rehire benefits in the higher education sector