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Judicial system reform could cost taxpayers extra $900,000 annually; decision to come Monday

Judicial system reform could cost taxpayers extra $900,000 annually; decision to come Monday

Dustin Hurst
March 15, 2012
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March 15, 2012

A bill to reform the finances and administration of the state retirement system for judges was on the docket in the House Judiciary, Rules and Administration Committee Thursday, but a time constraint prevented it from moving forward.

The measure would mean taxpayers pitching in at least $900,000 more each year to shore up the pension fund.

Committee chair Rich Wills, R-Glenns Ferry, was absent for Thursday’s hearing and vice chair Lynn Luker, R-Boise, had a commitment elsewhere in the Capitol 15 minutes after the hearing began.

The bill would hand administration of the independent pension system over to the Public Employee Retirement System of Idaho (PERSI), which administers the state’s fund for its workers and public school teachers.

The measure would also ask taxpayers and judges to pay more for pensions, though taxpayers would get hit twice through the new funding. Judges would increase their own contributions from 6 to 9 percent, and the state would jump its funding from 7 to 10.5 percent of judges’ salaries.

Civil filings fees would also increase from $18 to $26, though officials who negotiated the reform plan asked for $24.
The state’s share of the retirement cost would increase $206,000 annually in the next two years. The increase in filing fees would bring in an extra $724,000 each year.

The average judicial contribution would jump from about $6,700 to more than $10,000 annually.

Other key changes will come if the legislation becomes law. Judges would see cost-of-living-adjustments identical to those given to PERSI beneficiaries annually, typically about 1 percent per year.

The spouse benefit would be reduced under the plan. As it stands, spouses of deceased judges receive 50 percent of the benefit after death, a number reduced to 30 percent in the legislation.

Barry Wood, an Idaho judge, told committee members in the brief hearing that the legislation represents an effort to “ensure the stability of the fund in the years ahead.”

The pension account for judges is funded with about 86 percent of what it needs to meet long-term obligations, a number which Wood said is good, but not great. “While 86.24 percent is well-above national standards, we still need to match contributions to benefits,” Wood explained.

Rep. Linden Batemen, R-Idaho Falls, motioned quickly after Wood concluded his remarks to send the bill to the House floor. “I think we all know what’s gone into this,” Bateman said. “Good compromise bill.”

With the clock ticking and several lawmakers wanting to ask questions about the reform plan, Rep. Phil Hart, R-Athol, moved to hold the bill until Monday. That motion was approved unanimously.

Patti Tobias, the top court administration official, said the reform bill came only after eight meetings and several hours of discussion. Reps. Dennis Lake, R-Blackfoot, and Stephen Hartgen, R-Twin Falls, have shepherded the issue for the last year. Lake will testify on the legislation Monday.

The pension system, created in 1947, is one of the oldest in the state. It has 55 active members and 81 beneficiaries.

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