PERSI technology funding cut

BOISE – Legislative budget writers slashed a $13 million technology upgrade for Idaho’s state retirement system Monday amid fallout from an unsuccessful attempt last week by House GOP leaders to cancel a 1 percent cost-of-living increase in retiree benefits.

“It’s one of those things they can make a good case for needing it, but the reality of the political situation, I was afraid a motion with $13 million funding in it, given recent events, might not go through,” said state Sen. Joyce Broadsword, R-Sagle, who proposed the budget in the Joint Finance-Appropriations Committee.

State Sen. Jim Hammond, R-Post Falls, who co-sponsored the proposal, said, “We just thought it was the better part of valor to wait a year.”

Said state Rep. Maxine Bell, R-Jerome, “ ’Til we’ve forgotten and forgiven.”

The Public Employee Retirement System of Idaho hoped to begin the project in the coming year to replace its core information technology system, which has become obsolete and has needed frequent software patches to keep functioning.

Don Drum, PERSI director, said, “It’s an old system; it’s not supported by the vendor any longer. We’ve been supporting it in house. It’s one of those things that we need to transition to new technology.” But, he said, “There is some risk to us, but it’s not risk that we can’t try to address in other ways. We’ll move forward … and hope we can get it next year.”

PERSI was at the center of a political storm last week after House Republican leaders pushed hard to block a scheduled 1 percent cost-of-living pension increase for state retirees, overriding the recommendation of the PERSI board. Senate GOP leaders then let the bill die, allowing the increase to go ahead as scheduled. House GOP leaders said they were concerned about PERSI’s unfunded liability, which has grown as the stock market took a big dip.

As for the planned technology upgrade, Hammond noted, “It’s PERSI’s own funds, it’s not general funds.” And Broadsword said, “The current system does crash monthly.”

Broadsword noted that the system replacement still could go forward; it just would be delayed. Plans call for initial bids to be taken on the project this summer.

Minority Democrats offered a substitute motion to fund the system replacement now. “I don’t think we should be intimidated by past discussions here,” said Rep. Shirley Ringo, D-Moscow. “It is dedicated money and I have been quite impressed by the ability of the board to make decisions.”

That move, however, failed on a party-line, 4-15 vote.

The bottom line shows a 9.9 percent cut in total funding for PERSI next year; there are no state general funds in the budget.