Senate Releases 2017-2019 Omnibus Operating Budget (PSSB 5048)

The Senate released their 2017-2019 Omnibus Operating Budget (PSSB 5048) this morning.

Issues Impacting LEOFF Plan 2:

Contribution Rates (Sections 939 & 940)

Except for fire protection districts, the State contribution to LEOFF Plan 2 is eliminated making the contribution rate funding ratio 50% member and 50% employer. The state saves $109 million in 2017-19 ($111 million in 2019-21).

Merger (not included in budget proposal)

A merger of LEOFF Plan 1 with either TRS Plan 1 or LEOFF Plan 2 is NOT included in this Senate budget proposal.

Alternate Revenue (Section 941)

The $25 million alternate revenue payment scheduled for September 30, 2017 is canceled. Intent language is added that any distribution to the Benefits Improvement Account in 2019 may include a transfer from the LEOFF Plan 2 trust fund.

Other Sections of Interest:

Fire Insurance Premium Tax (Section 938)

Changes are made to the distribution of the fire insurance premium tax. Twenty-five percent of fire insurance premiums tax will be distributed eligible cities, towns, and fire protection districts with a cap of $2,000 per eligible firefighter. Eligibility criteria are specified.

DRS and OSA Administrative Expenses (Sections 942 & 943)

The DepartmentĀ of Retirement Systems (DRS) administrative fee of 0.18 percent on all employers is suspended during the 2017-2019 biennium. Expenses for administration of DRS and the Office of the State Actuary (OSA) are instead paid on a proportional basis from the interest earnings on the pension trust funds. There is intent language stating that his policy will be continued in subsequent fiscal biennia.

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