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Wed February 9, 2011
Treasurer, lawmakers seek constitutional amendment on pensions
Washington's pension system is underfunded to the tune of nearly $7 billion. Now the State Treasurer and a bipartisan group of lawmakers say the time has come to force the legislature to pay the pension bill.
Lawmakers have shortchanged payments to the state pension system on-and-off for the past three decades. State Treasurer Jim McIntire and lawmakers from both sides of the aisle want to make it impossible to continue to give into that temptation.
Their idea is to amend the state constitution to require that lawmakers pay at least 80 percent of the annual pension bill.
Republican State Senator Mark Schoesler (R-Ritzville) warns if Washington doesn't act it could lose its good bond rating:
"A pension is a contractual liability. If we don't make those pension payments the State Treasurer gets a call from Wall Street and it's not pretty."
Another worst case scenario? Washington could end up paying pensioners out of the state budget instead of the state retirement fund.
Amending Washington's constitution is no small task. It requires a two-thirds vote of the legislature and approval by the voters.
The constitutional amendment would also create a payment plan to pay-off the current unfunded liability in the pension system.
It would also have major implications for cash-strapped local governments. They too would have to fund pensions at 80 percent of recommended levels.
State Budget Crisis