Pension reform bill passes NM Senate

While other states like Illinois have ignored reforming its state pension plans that are hemorrhaging taxpayer money, New Mexico on Thursday took a step toward trying to fix at least half of the $12 billion hole in its pension system.

“I wish we had the money, I wish we could give employees a 3 percent raise every year,” Sen. George Munoz, D-Gallup, said on the Senate floor. “But we don’t have the money.”

Sen. Munoz has been spearheading Senate Bill 27 that aims to put the Public Employees Retirement Association (PERA) plan back on solid financial footing after actuaries have estimated the pension plan to hold $6 billion in unfunded liabilities.

“If we don’t do pension reform,” Munoz said, “our bond rating will be at risk. That’s what’s happened in Illinois and we can’t afford to have that happen here.”

The Munoz bill passed on a 38-4 vote and now heads to the House of Representatives.

“I think the bill’s chances are good in the House,” Munoz told New Mexico Watchdog after the vote.

But it remains to the be seen if some Democrats in the House try to attach amendments to the bill — which is what some of the more liberal members of the Senate tried to do Thursday.

Senate Majority Leader Michael Sanchez tried to amend SB27 to raise the increase in employer contributions (which is ultimately New Mexico taxpayers) from 0.4 percent to 1.1 percent.

But as was pointed out in New Mexico Watchdog last month, PERA’s employer contributions is already among the highest in the entire country.

“We have to remember where this money comes from,” Sen. Mark Moores, R-Albuquerque, said. “It comes from the taxpayers.”

Other Democrats fought to get the Sanchez amendment passed, saying the 1.1 percent increase was in line with the original bill.

“We have the money,” Sen. Gerald Ortiz y Pino, D-Albuquerque, said. “The message we’re sending is loud and clear — don’t trust us.”

“If we have the most generous retirement plan,” said Sen. Michael Padilla, D-Albuquerque, “that’s something we should be proud of.”

But other Democrats pushed back.

“It’s a matter of being fiscally prudent with the state coffers,” said Sen. Clemente Sanchez, D-Grants.

In the end, the amendment failed 18-24 with at least six Democrats (Clemente Sanchez, Phil Griego, Cisco McSorley, Mary Kay Papen, John Arthur Smith and Munoz) joining Republicans in the vote.

While there was resistance from some police and fire unions, throughout the committee process the New Mexico chapter of the American Federation of State, County and Municipal Employees (AFSCME) had supported the Munoz bill.

The other major pension plan in New Mexico is the Educational Retirement Board (ERB) which is made up of teachers and school employees. It’s also facing an estimated $6 billion gap. Two bills are circulating through both houses but have not reached the floors of the House or the Senate.

“What this says is, we care about our (public) employees and we want to make sure they have a pension fund,” Munoz said after the vote. “That’s what this says.”