Top Vermont Democrats are distancing themselves from a House leadership proposal to overhaul the state’s pension system as the plan faces mounting criticism from public-sector employees, unions and members of their own party.
The debate has emerged as the thorniest and most pressing of this year’s legislative session — other than the state’s response to the Covid-19 pandemic. It is also the first major test for the new Democratic leaders of the Legislature: House Speaker Jill Krowinski, D-Burlington, and Senate President Pro Tempore Becca Balint, D-Windham.
Krowinski and House leaders have faced blowback since they released their plan last week to address Vermont’s ballooning pension debt, which state Treasurer Beth Pearce projected in January had grown by another $600 million. Their proposal would force teachers and state employees to work longer, contribute more and receive fewer benefits.
For the first time Wednesday, Balint said she would not support the House plan in its current form.
In an interview with VTDigger, the Senate leader raised concerns over a provision that would raise the retirement age for most employees, pegging it to when they become eligible for Social Security. The change could require some teachers to work an extra 10 years before retiring without penalty.
“That’s probably the thing I’ve heard the most about from constituents who hold pensions, and so that’s concerning to me,” Balint said.
She wasn’t the first top Democrat to pour cold water on the plan. In a statement released Saturday, Lt. Gov. Molly Gray said the House proposal “represents a broken commitment to our teachers and employees made at the time of hiring.”
By Wednesday, even Krowinski appeared to walk back a previous commitment to take action this year. In an interview, she said she could not pledge to pass a complete pension reform plan before the Legislature’s expected adjournment in May. Her apparent retreat came as the Vermont State Employees’ Association, which represents state workers, planned a rally in the speaker’s Old North End district on Saturday to protest the plan.
Krowinski, who worked with House committee chairs behind closed doors to fashion the proposal, said Wednesday that she never expected the “initial ideas” they came up with to be signed into law without change. She said she always intended for the House Committee on Government Operations to take up the legislation and amend it as its members saw fit.
“This was a place for the committee to start the conversation and to get ideas and feedback from everyone around the table,” the speaker said.
Krowinski declined to say what shape she expected the plan would ultimately take.
“I think it’s premature to say ‘This is the way we are definitely going or definitely not going’ because I want the committee process to happen, and for them to hear all the ideas out there and see if there are things that there might be common agreement on,” she said.
The state employees union and the Vermont National Education Association, which represents teachers, have called on lawmakers to slow down and study the matter over the summer before taking action. Krowinski, on the other hand, had been adamant that the Legislature take action this year.
On Wednesday, the speaker said she believed the legislation would move forward this session, suggesting there was already some “consensus” around how the pension system should be governed, but she stopped short of committing to final passage.
“I am working on the side of I really want to bring people to the table to see if we can find a path,” Krowinski said. “I am working hard. I am all in to see if we can figure out a way to get this done.”
Balint, the Senate leader, said that in her conversations with the speaker, she had also come to the conclusion that the House proposal was merely a “starting place” to help Vermonters understand “the gravity of the situation.” Krowinski and her peers recognize that the pension system is “going over a cliff” and want to ensure that it remains stable, Balint said.
According to Balint, any plan to reform the pension system would ultimately pinch state workers and teachers. “I think public employees are going to feel some pain — not clear exactly what that will mean,” she said. “I know taxpayers are going to feel some pain.”
Balint also argued that lawmakers had been unfairly singled out as having caused the pension problem. Though the Legislature and governors underfunded the pension system for years — particularly in the 1990s — the state has fully funded its recommended contributions to the pension system since 2007, she said.
Balint instead pointed to the demographic challenges plaguing the system — fewer younger teachers paying into it while more teachers reach retirement age — and the investment decisions of the committee charged with overseeing pension funds.
Gray, the lieutenant governor, said in an interview Wednesday that lawmakers should look for other avenues to fully fund the state’s pension system. She said that raising new revenue is a “potential option,” as is making cuts to state programs.
Gray also suggested that the state could work with its congressional delegation to secure federal funding, noting that Vermont is not the only state facing pension woes.
In her statement last weekend distancing herself from Krowinski’s plan, Gray said that three-quarters of the state’s teachers and a slight majority of its state workers are women.
“It’s not to criticize her work,” she said of the speaker. “It’s just to say that I think we have to find a path forward that ensures that our teachers, and especially the 75% of women in Vermont, have something that’s a little bit more equitable and more fair that creates more economic stability.”
Since the start of this year’s legislative session, Republican Gov. Phil Scott has largely avoided the pension debate, but he said last week that the House proposal was a “step in the right direction.”
In recent days, union leaders and some Democrats have criticized Scott for declining to pitch his own plan to address the pension problem. Krowinski said she wished Scott would lead on the issue.
“I think that this is incredibly important when it comes to the future of what we value as a state and how we take care of our people,” the speaker said. “And we’re not taking care of all of our people right now, and he’s absent and that’s really frustrating.”
In a statement, Scott’s press secretary, Jason Maulucci, said the governor and his administration “have been at the table as a willing partner.” But, Maulucci said, the governor believes “the majority party needs to take a leadership role on pensions because that is the only way this conversation will actually get anywhere.”
Though pressure from the public-sector unions appears to be having its desired effect, Balint said the rhetoric had grown too personal — particularly complaints targeting Krowinski.
“I would love the personal attacks on the speaker to calm down because that is not bringing us to a solution,” Balint said.
