Future Fund Story Archives - West Virginia Public Broadcasting

PEIA On Track For Short-Term Funding, Long-Term Fears

A finalized PEIA fiscal plan has no premium increases in 2023 and 2024 for state employees or retirees.

Following a statewide series of public comment sessions, a now finalized PEIA plan has no premium increases in 2023 and 2024 for state employees or retirees. Premiums will go up 9.7 percent for non-state participants.

The agency’s five-year outlook projects zero increases through 2027. But anticipated rising healthcare costs would require nearly $400 million more in public funds to offset shortfalls.

West Virginia Education Association President Dale Lee said the future financial projection is old news that needs new attention.

“I feel like I should go ahead and record my remarks and just punch play every time they have a meeting, because it’s the same remarks for the last two years,” Lee said. “I applaud Gov. Jim Justice, and I truly believe that there won’t be any increases under his watch. After he leaves, we’re facing some dire circumstances.”

Justice has pledged to keep premiums flat while he’s in office. Following the 2018 statewide teacher strike, he established a $100 million reserve fund to cover any rising insurance costs.

But what happens when Justice is out of office?

Lee said concerns over long term funding harken back to a 2019 legislative recommendation from the PEIA task force.

Lee said one current legislative leader supported the recommendation, but has yet to act.

“At the time, Senate President Craig Blair was the Finance Committee Chair and a member of the task force,” Lee said. “He seconded the motion to make this a recommendation that passed. And yet it hasn’t made its way to a committee agenda since 2019.”

Lee said legislation requiring PEIA money to go into the general fund will be proposed in the upcoming regular session.

PEIA Faces Long-Term Funding Challenges

A five year outlook published by the Public Employees Insurance Agency (PEIA) keeps state employee premiums at zero through 2027, but anticipates transferring in more than $375 million in public funds to shore up the program.

At a PEIA Finance Board meeting Thursday, CFO Jason Haught laid out a 2024 draft plan that was approved to go to the next step — public hearings.

The 2024 projected plan does include some deductibles and out-of-pocket adjustments.

Under-performing stock market investments and resuming pandemic-delayed elective medical procedures helped create a $92 million deficit in 2022. In 2018, rising insurance premiums and no pay raises sparked a statewide teachers strike.

Gov. Jim Justice has pledged to keep premiums flat during his terms in office. Following the teacher strike, he established a $100 million reserve fund to cover any rising insurance costs. The PEIA long-term outlook figures use all of that funding for 2023 and 2024, with nothing available after that. The concern is the rising costs going into the next gubernatorial cycle.

PEIA Chairman Mark Scott said the agency plans on resuming funding discussions to cover the long-range cost projections and avoid benefit reductions.

“There are discussions ongoing with the legislature about ways that we might be able to impact these price increases going forward,” Scott said. “We are definitely willing and wanting to listen to ideas from all parties on the ways that we can keep these costs from increasing as high as we estimate.”

The 2024 plan will be presented at a series of statewide public hearings, beginning next week.

W.Va. PEIA Addressing Funding Challenges

After a major financial shortfall, the Public Employees Insurance Agency is working on shoring up its future funding.

After a major financial shortfall, the Public Employees Insurance Agency (PEIA) is working on shoring up its future funding. The agency ended the past fiscal year down $93 million.

West Virginia Education Association President Dale Lee said the shortfall came, in part, from a reduction in projected investment income and an increase in post-pandemic elective surgeries.

“The investment income was less than they projected due to what happened in the stock market,” Lee said. “The number of claims was higher. During the COVID-19 years, people were putting off the elective procedures, and in 2022 people were starting to do those again, so the number of procedures that were being paid for was higher than what they had anticipated.”

Lee said PEIA officials have cost savings measures now in place and believes Gov. Jim Justice will honor his promise to keep PEIA solvent.

“At some point you’re going to have to put money in,” Lee said. “I believe the governor will put the $93 million in so there won’t be any increases for this next year. But where the problem lies is down the road come about 2026.”

Lee said concerns over long term funding go back to a 2019 legislative recommendation from the PEIA task force.

“Put PEIA money into the general fund so that you know that you’re funding it. Provisions that the state shall pay no less than 80 percent of that and the employee shall pay no more than 20 percent,” Lee said. “The cost savings would come under the employee share. It’s a way of ensuring for the long term, the viability of PEIA. At the time, Senate President Craig Blair was the Finance Committee Chair and a member of the task force. He seconded the motion to make this a recommendation that passed. And yet it hasn’t made its way to a committee agenda since 2019.”

PEIA will release its new financial plan at a statewide series of public events in November.

Constitutional Amendments Make it One Step Closer to Nov. Ballot

In a rare occurrence at the statehouse, Senators debated three possible Constitutional Amendments on the floor, changes that will ultimately be sent to the people for their approval.

Senate Joint Resolution 10 proposes a Constitutional Amendment designating the right to hunt and fish for West Virginians.

Sen. Corey Palumbo amended the resolution on the floor Wednesday, clarifying that the people of West Virginia have the right to hunt and fish the state’s game, but the state still maintains the ability to regulate those activities.

“What I fear in this amendment is that we are trumping those private property rights which our ancestors were so concerned about,” said Sen. Clark Barnes in opposition to the amendment. “Mr. President, I’m not urging members to vote one way or another, but I don’t believe the right to hunt and fish trumps private property rights.”

The amendment passed on a vote of 31 to 2, with Senators Barnes and Mike Hall voting against it.

Senators then moved to Senate Joint Resolution 12 proposing a Constitutional Amendment claiming the waters of the state for the use and benefits of its citizens.

The resolution came from Senate Majority Leader John Unger who has been increasingly vocal about protecting the resource since the Elk River chemical spill last month.

The amendment reads:

“It shall be the policy of the state of West Virginia that the water resources of this state shall be protected, conserved, utilized, and developed for the benefit, enjoyment and general welfare of its citizens consistent with and subject to the riparian rights and groundwater rights of the owners of real property.”

The resolution passed unanimously.

The final Senate Joint Resolution taken up for consideration was SJR 14, protecting the state’s Future Fund and designating how the interest earned from the fund can be spent.

The resolution couples with Senate Bill 461, Senate President Jeff Kessler’s bill creating a Future Fund. It is created through statute, but how those funds can be used after its establishment must then be determined by the people.

The amendment proposes restricting access to the principle for six years following its creation and restricts its appropriation for things like education, infrastructure or tax relief measures.

The resolution passed unanimously.

If all three resolutions are passed by the House, they will appear on the ballot in November for approval by the people.

W.Va. Senate Passes Future Fund

The West Virginia Senate has unanimously passed a bill to conserve and invest a portion of oil and gas revenues to use for future infrastructure and economic development.

The Future Fund Bill passed Friday sets aside 25 percent of the severance tax revenues collected from private oil and gas companies above a $175 million benchmark. This benchmark projects funds needed to sustain government operations.

The fund would collect interest for six years before being used for economic development projects, building infrastructure and increasing teacher salaries.

Senate President Jeff Kessler said he was pleased the bill passed the Senate without any resistance or rejection. He said he hopes to see the state cash in on a growing oil and gas industry and to reserve some of its excess for future prosperity.

W.Va. Senate Hopes to Invest Portion of Oil Tax

A state Senate committee has approved a proposal to invest some of West Virginia’s oil and natural gas revenues for future infrastructure and economic development.

The Future Fund Bill would set aside 25 percent of the severance tax revenues collected from private oil and gas companies, once the fund hits $175 million. The fund would collect interest for six years before being used for economic development projects, building infrastructure and increasing teacher salaries.

Wyoming Democrat Daniel Hall says oil and natural gas revenue is increasing and expected to continue to along with gas prices and expanded natural gas drilling in the state’s southern shallow wells.

If these numbers continue to increase, Hall anticipates this fund to be a significant asset.