Cooperation and goodwill are essential elements to achieve progress in Nebraska. That positive spirit has enabled sensible steps in recent years to help the Omaha Public Schools to begin addressing the huge challenges it faces in meeting its unfunded liabilities for OPS employee pensions.
An unexpected effort last week by Gov. Pete Ricketts to kill a current proposal involving the OPS pension fund violates that constructive spirit and needlessly threatens continued progress. The administration is raising a false claim — that Nebraskans statewide will be at risk of taking on the OPS financial liabilities if management of the OPS fund is transferred to the state.
Such a misleading claim is contradicted by the entire history of this issue. For years, every time the State of Nebraska has taken any action in regard to the OPS pension system, lawmakers in committee and in floor debate have been unanimous in stating, clearly and emphatically, that Nebraskans statewide must not take on any of the OPS pension liabilities. That is a crucial, common-sense stance the Legislature has rightly adopted throughout the past five years.
State senators emphasized that point in 2016 when the Legislature voted overwhelmingly to transfer investment authority from the OPS pension board to the state investment council. The governor signed the measure into state law.
In 2019, State Sen. Mark Kolterman of Seward, chairman of the Legislature’s Retirement Systems Committee, worked with stakeholders to consider a follow-up. The state gave the go-ahead for a study (paid for by OPS, a $140,000 cost) to examine the feasibility of transferring management of the OPS pension fund to the state. The projected long-term cost savings would be about $250,000 a year.
Such a transfer would end all of OPS’s management duties in regard to the pension system. The district would then have one remaining, all-important obligation: bearing the full burden of meeting the system’s financial liabilities. State law, in fact, now requires OPS to meet its actuarily required annual payment for long-term pension stability, and the district has been exceeding that amount the past several years.
The Legislature voted 47-0 in 2019 for the study to be done, and the governor signed the legislation. Since then, a wide variety of stakeholders have cooperated for the management transfer to occur. OPS agreed from the get-go to cover the upfront costs of around $4 million for new computer technology to enable the management change.
It’s baffling, then, that after so much complicated work and cooperation, the Ricketts administration would indulge in an eleventh-hour effort to sabotage the initiative.
Undermining an effort involving OPS might be good politics in the view of some, but it would be terrible public policy. The Legislature should move forward with this initiative and, if necessary, override a gubernatorial veto. The public interest, and not scaremongering by the governor, must prevail on this issue.