At yesterday's press conference, she outlined major pension and health care reforms that will save tens of billions of dollars over the next 25 years.
By eliminating the automatic pension increases paid to TRS 1 and PERS 1 employees, Gregoire says the state would immediately cut its unfunded liability in half and save $2 billion over the next two biennia. She proposes other changes such as eliminating the no-penalty provision for future new hires and closing the retire-rehire exception for certain retirees in higher education. In total, Gregoire's pension plan would save $11.3 billion over 25 years. (Note: Rep. Reuven Carlyle introduced a bill yesterday that would also address some of the retire-rehire issues in higher ed.)
Her health care proposal aims to save $26 billion over the next ten years by focusing on reducing health care cost inflation to no more than 5 percent per year, paying for Medicaid and other health care services based on outcome instead of number of office visits, and better leveraging the state's purchasing power by consolidating health care purchases into a single agency.
In today's press conference, Gregoire suggested major agency consolidation plans that she says will reduce overhead costs and minimize duplication across agencies. She anticipates savings of about $30 million in the next biennium and a reduction of 125 employees. She wants to:
- Consolidate the state's 11 natural resource agencies into five
- Merge the Departments of General Administration, Personnel, Printing, and portions of the Department of Information Services and the Office of Financial Management merge into a new Department of Enterprise Services (Gregoire alluded to more details in January about other broad changes regarding DIS's IT management)
- Consolidate the state’s Human Rights Commission, Office of Minority and Women’s Business Enterprise, Commission on African Affairs, Commission on Hispanic Affairs and Commission on Asian Pacific American Affairs into a single Office of Civil Rights
- Eliminate 36 more boards and commissions (dozens were already eliminated last session)
- See whether anything comes of discussions between the Department of Corrections and the Washington Association of Sheriffs and Police Chiefs about short- and long-term strategies to maximize each correctional systems’ (state and local) strengths and integrate certain services
For more information, you can see yesterday's press conference on the Governor's pension and health care reform ideas here.
Today's press conference is here.
