Lawmakers, PERS director agree they must work together in the future

State lawmakers will need to readdress concerns about the Public Employment Retirement System of Mississippi in 2025 if it is to remain viable long term, according to a July study.

Legislative actions in the 2024 Session to reduce public employer contribution rate hikes and increase state funding are not enough to address billions in unfunded future benefits to retirees, according to a report released by the Legislature’s third-party watchdog group, the Performance Evaluation and Expenditure Review Committee.

Projections show the state’s retirement plan being less than 50% fully funded by 2047 and having $25 billion in liabilities. According to several municipal leaders who spoke to the Clarion Ledger earlier this year, the legislative move from lawmakers in the past session should save public employers from cutting positions and raising taxes to keep and hire more public employees.

“Change in approach for increasing the employer contribution rate, in addition to the one-time funds transfer, reduces the plan’s projected future funded ratio from 65.5% to 49.9%,” the report reads. “…The PERS plan is currently expected to be at a lower-funded level in the future than it currently is today.”

PERS Executive Director Ray Higgins told the Clarion Ledger he wasn’t surprised by the report’s findings.

“The PEER analysis seems to be an accurate report and generally reconciles with our information,” Higgins said. “Also, the legislative action from last session appears to be a short-term solution.”

While the report does not list out any specific recommendations for lawmakers this coming year, it says continued work will be necessary to fix the retirement system that has 118,000 retirees receiving benefits and 147,000 active members paying into the system.

In 2023, the PERS governing board, made up of mostly elected members, as advised by financial actuaries who watch over the state’s retirement plan, passed a rate increase on public employers, such as cities, counties and school districts from 17.40% to 19.90% that was to take effect July 1. The rate would have continued to increase to 22.4% by 2027.

In the 2024 Session, the Legislature passed two bills. Senate 3231, prohibits the PERS Board’s plan to gradually increase the employer contribution rate and replaces it with a plan to increase to 19.90% over the next five years in 0.5% annual increases. SB 3231 also takes the board’s only regulatory power to increase rates and puts it in the hands of the Legislature.

SB 2468 enacts a one-time transfer of $110 million of capital expense funds into the PERS trust.

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Lt. Gov. Delbert Hosemann’s Deputy Chief of Staff Leah Rupp Smith told the Clarion Ledger efforts Hosemann helped push forward that resulted in those bills’ passage led to a potentially more stable retirement system.

“To avoid this calamity while developing a future solution, the Legislature adopted a less-aggressive employer increase,” Smith wrote via email. “We are now informed the plan has a projected future funding ratio of 65.5% as of 2047, as compared to 48.6% projected one year ago.”

Republican House Speaker Jason White’s Communications Director Taylor Spillman did not reply to several emails requesting White’s comments on the report.

What are the big problems?

Higgins previously said the ratio of retirees to active members has seen a reverse trend since 2013, when there were 93,000 retirees and 162,000 active members. This increases the unfunded liability of the system as fewer people take jobs in government, reducing active members and more people retire, increasing the funding obligation of PERS.

The other issue lies with projections for the retirement plan’s future if state lawmakers decide not to take action in the years to come.

“While the ($110 million) funding for the first year is comparable, each year in the future could potentially see a greater deviation in expected employer contribution revenues for the PERS plan,” the report reads. “This deviation does not immediately constitute a problem for the PERS plan; however, careful evaluation of the plan’s future liabilities and funding needs will be necessary to ensure the sustainability of the PERS plan.”

Are there any solutions?

Higgins and Smith both said future work on PERS is still a top priority.

Higgins specifically mentioned a new retirement benefits package that could be offered to new public sector employees, which the PERS board has called tier 5.

“The Board has previously recommended a tier 5 for new employees to help better sustain PERS in the future and is currently considering what may be included or resubmitted in next year’s legislative package,” Higgins said.

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Earlier this year, Hosemann told the Clarion Ledger he wanted to see evidence that a new tier of benefits could help maintain the retirement system long term. Smith did not confirm whether Hosemann’s office is currently studying that idea in the legislative off season, but she did say the Legislature is looking at several ideas.

“The Legislature is exploring any option for a more viable plan,” Smith said. “The Lt. Governor continues to be committed to fulfilling current employee and retiree benefits, including the cost-of-living adjustment for these individuals.”

Grant McLaughlin covers state government for the Clarion Ledger. He can be reached at gmclaughlin@gannett.com or 972-571-2335.

Waiting for my suitcase in the arrivals hall at Jackson airport the other evening, it occurred to me that the luggage carrousel was a pretty good metaphor for Mississippi politics.

Like suitcases on a carrousel, many leaders simply sit on the conveyor belt of state politics, waiting their turn to get moved along to the next role.

Too often leaders are carried along by time and process, rarely offering any vision as to what our state should do differently.  That explains why Mississippi conservatives have achieved less in 12 years than Arkansas, Louisiana and Alabama have accomplished in the past 12 months. Louisiana did not even have a Republican governor this time last year, yet they’ve already passed universal school choice.

Things could be about to change if House Speaker Jason White has his way.  This week, White announced that he will be hosting a Tax Policy Summit on Sept. 24 to take a deep dive into the prospects for tax reform. 

My friend, Grover Norquist, will be speaking, as will Gov Reeves, as well as leading conservative figures from the state Legislature.

Having a conversation in public matters because in the past the leadership in our state Senate has done what it can to head off tax cuts. Bringing the facts of what can and cannot be done into the open makes it far harder for anyone to keep finding new excuses to oppose actual conservative policy. 

Sunshine is the best disinfectant against the putrid politics of backroom deals. We have seen far too many backroom maneuvers used to kill off good conservative policy in this state.  Back in 2022, Mississippi passed a law to cut the state income tax to a flat 4 percent. This $525 million tax cut, driven forward by Speaker Philip Gunn and Gov Reeves, benefited 1.2 million taxpayers and their families. But we must not forget how some in the Senate fought against it — not in the open, of course. 

Weak Senate leadership has a history of opposing conservative proposals in our state. Seldom do they have the courage to come out and explicitly kill off conservative measures. Instead, they do it on the sly.  The Senate leadership maneuvered to stop anti-DEI legislation in 2024. I don’t recall anyone coming out and explaining why they opposed anti-DEI law. They just killed it in committee with a nudge and wink. 

For three years in a row, the Senate leadership has killed off attempts to restore the ballot initiative. Again, those against resorting the ballot lack the courage to say they are against it. They killed that, too, on the sly. 

Rep Rob Roberson’s excellent school funding reform bill, perhaps the only big strategic achievement of this year’s session, passed despite attempts to scupper it by some in the Senate. (Part of the backroom deal to get the bill passed was to change its name. It really was that petty.) When the Senate leadership wants to oppose an authentically conservative policy, they follow a now familiar pattern. 

A reason is cited as to why what is being proposed can’t be done. School choice, we were once told, would be unconstitutional. An anti-DEI law, it was implied, was unnecessary because there was no DEI on campus.

Once that excuse is shown to be nonsense (there is no constitutional bar to school choice, DEI is rampant on campus), another excuse is promptly conjured up. And on it goes.

Each time the Senate leadership opposes conservative policy this way, I wonder what their alternatives are. The answer is that most of the time there are none. It is pretty low grade to oppose ideas simply because they are not your own.  Eventually, of course, a suitcase that sits on the carousel for too long ends up in lost luggage.

As a direct consequence of the 2022 Reeves-Gunn tax cuts, Mississippi is now starting to see a flood of inward investment into the state.  

Every time you hear about a new factory opening up in our state, remember who and what helped make it happen. I am very optimistic that this tax summit could see further progress to make our state more competitive. 

— Douglas Carswell is the president and CEO of the Mississippi Center for Public Policy.

JACKSON, Miss. (AP) — A former tax assessor and collector in north Mississippi checked into a residential treatment center for a gambling addiction after he called the state auditor’s office and confessed to misusing more than $300,000 in public money, his attorney said Tuesday.

Shannon Wilburn, 49, resigned in April from the elected office he had held in Benton County since 2016, and he began the 12-week addiction treatment in late July, his attorney Tony Farese told The Associated Press.

“I’ve known Shannon all of his life,” Farese said. “We are shocked that he finds himself in this situation.”

Mississippi Auditor Shad White announced Tuesday that Wilburn has been charged with one count of embezzlement. The announcement came days after Wilburn was indicted. Farese said Wilburn turned himself in to the sheriff’s office Friday, then posted bond and returned to the treatment program.

Wilburn is accused of taking $327,055 paid to the Benton County Tax Collector’s office and using the money for personal expenses, Farese said. He said Wilburn confessed to the auditor’s office before hiring legal representation and has continued to cooperate with investigators.

“He apologizes for disappointing the citizens of Benton County and the state of Mississippi,” Farese said.

If convicted, Wilburn would face up to $5,000 in fines and 20 years in prison.

White said Wilburn’s employment as a Benton County elected official was covered by $200,000 in surety bonds to protect taxpayers from losses from corruption. The county also has an insurance policy that covers theft.

“The dedicated team at the State Auditor’s Office will continue to work closely with prosecutors to get record results, one case at a time,” White said in a statement.