DOVER, Del. (AP) — A bill requiring Delaware state employees to contribute more for their pension and health care cleared a House committee with little discussion Wednesday.
The bill, the result of weeks of negotiations involving lawmakers, state employee unions and Gov. Jack Markell's administration, will be put to a House vote Thursday, House Speaker Robert Gilligan said after the measure cleared the House Administration Committee.
The legislation requires state employees hired on or after July 1, 2012 to contribute a higher percentage of their pay toward their pensions than current state employees do and revises the pension calculation for those new hires.
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New employees would contribute 5 percent of their pay after the first $6,000, up from 3 percent, and would have to work for 10 years instead of five to be vested. The bill also increases age and service requirements for full pension benefits.
State employees also would be required to pay more their health care insurance starting in 2012. A free basic plan would be eliminated as of July 2012, and married couples who currently receive free health care because both spouses work for the state would have to pay $25 a month.
Officials estimate the changes could save $131 million over the first five years and $489 million over 15 years.
House Minority Leader Greg Lavelle noted that the estimated annual savings, roughly 4 percent a year over the first five years, don't even keep pace with the rate of growth in pension and health care costs.
"How about something substantial, rather than something until the next election?" Lavelle, R-Wilmington, said after the meeting. "You hear all the time about kicking the can down the road."
Budget secretary Ann Visalli acknowledged that the growth in health care and pension costs must be addressed, but suggested that doing nothing was not an option.
"If we do nothing, we're looking at a significantly higher expense for the state in the future," she said.
House Majority Leader Pete Schwartzkopf said the bill strikes an appropriate balance.
"To come to an agreement on this type of legislation is big," he said.
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