Nikki Haley’s PEBA and Bigger Government

Nikki Haley’s PEBA and Bigger Government

By Paul Gable

The proposed overhaul of state government and the end of the Budget and Control Board ended Thursday at 5p.m. While Gov. Nikki Haley didn’t get the streamlining of government that she supposedly was pushing, she did manage to add a level of bureaucracy in the form of the Public Employee Benefit Authority.

Established as part of an overhaul of the state retirement system, the PEBA adds a new level of bureaucracy in the form of an 11 member board that is required to meet once a month and where each member is paid $1,000 per month for this one day meeting.

Added to the S.C. Retirement System Investment Commission and the S.C. Budget and Control Board, who also have their hands in at least part of public employee benefits, the PEBA doesn’t make a lot of sense to us.

Maybe the secret to the establishment of the PEBA is in the appointments. The governor gets to appoint three of the members while the President Pro Tempore of the Senate, the Senate Finance Committee Chairman, the Speaker of the House and the Chairman of the House Ways and Means Committee get to make two appointments each.

It will be very interesting to see who the new 11 board members turn out to be.

According to a press release from Speaker Bobby Harrell, House members of the conference committee were against the establishment of the PEBA, but were forced by the Senate members and Haley to either accept the new bureaucracy or see pension reform go down the drain.

Pertinent comments from the press release:

“…there was an eleventh hour full court press by the Governor and the Senate to grow government by creating a brand new, and constitutionally questionable, bureaucracy called PEBA.  On Wednesday, armed with a PEBA endorsement letter from the Governor, the options proposed to the House were made very clear – include PEBA or watch retirement reform die.

“Saving our state retirement system and making its fund solvent was one of the biggest issues the General Assembly addressed this session.  The system’s $14 billion unfunded liability had to be addressed this year to secure the state retirement system.

“But it is a real shame that in order for us to get this crucial reform plan passed, we were forced to take on unnecessary government growth and a newly added bureaucracy.

“Having PEBA’s non-elected members overseeing state health insurance and retirement plans not only threatens our state’s AAA Credit Rating but makes the entire retirement bill subject to being thrown out as unconstitutional by the South Carolina Supreme Court.

“The last bobtailing case brought before the court resulted in the entire bill, not just the offending sections, being thrown out as unconstitutional.  With a ruling that indicated this was going to be the new standard for how our state’s Supreme Court addressed these types of cases from now on, the Governor and Senate are playing a game of constitutional Russian Roulette with our state employees’ retirement fund.”

Maybe the governor and Senate leaders didn’t want to see retirement reform at all and this new board is a way to ultimately get it all thrown out by the courts.

We’ll have to wait and see what develops.