All eyes on the House after Senate approves pension reform

A jubilant Senate claimed victory on a historic public safety pension overhaul on Thursday, passing a long-awaited and hard-bargained package of reform bill out of the chamber with unanimous support.

Republican Sen. Debbie Lesko, who worked with various stakeholders for almost a year before sponsoring the pension reform legislation this year, said people laughed at her when she first said she anticipated unanimous support on the legislation in the Senate.

“I’m very happy to see that all of my fellow senators supported this very important pension reform,” she said, after the legislation passed the Senate.

But even as senators were congratulating themselves for accomplishing the seemingly impossible by bringing together various competing interests to mold a broad coalition on the hot-button issue, trouble was brewing in the House.

Although the three-piece package, which includes a constitutional referendum that would need voter approval, has nearly two-thirds of all members of House of Representatives listed as co-sponsors, House Republican leadership, including Speaker of the House David Gowan, were not among those sponsors.

Supporters of the legislation said Gowan and House Appropriations Committee chair Justin Olson were throwing up road blocks for the Public Safety Personnel Retirement System reform in the lower chamber, despite its broad support from representatives of both parties.

And time is of the essence.

Gov. Doug Ducey wants to put the legislation on the special election ballot in May, which means the package must be approved by both chambers by Feb. 15 in order to give elections officials enough time to prepare the ballot.

Lesko and others have described the Public Safety Personnel Retirement System as dogged by fiscal unsustainability, broken and on the precipice of bankruptcy as pension costs are spiking and related debts are piling up. She argued her legislation will save cities and the state untold millions over the coming decades and finally put the pension system on the path of fiscal stability.

But Gowan didn’t seem convinced that the legislation has the support in his chamber, and the speaker didn’t seem to be in any rush.

Flanked by a handful of law enforcement officers from the Arizona Police Association at Wesley Bolin Plaza, Gowan on Wednesday received the group’s endorsement of his bid in in Arizona’s 1st Congressional District.

Arizona Police Association is the only public safety group opposing the public safety pension reform package.

The timing raised eyebrows at the Capitol, where observers speculated that the endorsement might be another bad sign for the reform package’s chances in the House.

But at the press conference, Gowan danced around questions about whether he would support the pension overhaul, saying only that he needs to speak to his members before making a decision.

“That’s the commitment I gave to these guys,” he said, referring to the APA.

When pressed if he would commit to getting the legislation out of the House by Feb. 15, Gowan replied, “You know? I hope so.”

APA President Justin Harris said Gowan is a big supporter of public safety, and he is confident the speaker and his leadership team will listen to law enforcement before making a decision on the pension reform package.

“Whatever Speaker Gowan is going to be supportive of is going to be indicative of what our groups are going to be supportive of,” Harris said.

The other major force working against the pension reform package is the Arizona Tax Research Association, a powerful lobbying group whose president, Kevin McCarthy, testified against the legislation during its hearing in the Senate Finance Committee on Wednesday. He argued essentially that the reform doesn’t go far enough.

In fact, McCarthy said he agrees with all the major reform points included in the bill, but said he doubts the projected savings will materialize.

Lesko acknowledged that she too wanted the proposal to make more significant changes, but said in order to reach the broad consensus, she had to give and take.

“The thing is that when you live in reality, you have to negotiate, and we don’t get everything we want,” she told McCarthy in the hearing.

Olson, the House Appropriations Chairman and point-man for the pension reform legislation in the House, was a longtime employee of ATRA. Supporters of the legislation point to him as the main roadblock in the House. Olson did not return calls for comment.

House Republican Whip David Livingston noted that the House has not introduced a mirror version of Lesko’s Senate legislation, as the chamber would normally do for legislation that is on the fast-track.

He said House Republican leadership is being “very careful” about making sure Lesko’s legislation is the best way to solve the pension crisis before agreeing to put the legislation up for a vote in the House.

Livingston noted that most of the work on the reform has been done on the Senate side, and said that House leadership had questions and suggestions for stakeholders, but “that doesn’t mean we’re going to make changes.”

Still, Livingston didn’t rule out the House making changes, and wouldn’t discuss which aspects of Lesko’s legislation House leadership believes should be changed. He also wouldn’t promise that the chamber would take up the legislation before the February 15 deadline to get the language to elections officials to put the constitutional change on the May special election ballot.

Livingston said that, although 39 House members have signed on as co-sponsors of the legislation, he thinks that is more indicative of their desire to do something rather than a broad agreement that Lesko’s legislation is the best possible solution.

“We all agree that something has to be done. But the question is: Are we at the optimum agreement? And maybe we are. That’s what we’re trying to find out,” he said.

But supporters of the package have essentially described the trio of measures aimed at overhauling the public safety pension system as too important to fail, and argued the package is therefore unstoppable.

Even with top-level opposition in the lower chamber, supporters of the reform package say they are confident it will pass the House in time to be put on the May ballot.

“I can’t wait to support Debbie Lesko’s efforts here in the House next week,” said Republican Rep. T.J. Shope, one of the 39 co-sponsors of the bill in the House.