$1 million for Hotshot pension salvaged

Original $7.5 million appropriation was swept away in favor of education funding

Sen. Karen Fann

Sen. Karen Fann

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Rep. Noel Campbell of Prescott (Capitol Media Services 2017 file photo by Howard Fischer)

The wave of red that brought in higher salaries for Arizona’s teachers also swept away a bill that would have helped the finances of the City of Prescott.

The $7.5 million state appropriation that was proposed during Arizona’s 2018 legislative session to help Prescott pay its pension costs for the fallen Granite Mountain Hotshots was a casualty of this spring’s successful “Red for Ed” campaign, say local legislators.

Still, a last-minute effort in the House of Representatives salvaged a part of that effort, resulting in a $1 million appropriation in the state budget.

The state’s general appropriations bill (House Bill 2665), which was approved earlier this month, states: “In addition to any other appropriation, the sum of $1 million is appropriated from the state general fund in fiscal year 2018-2019 to the Public Safety Personnel Retirement System (PSPRS) for deposit in the employer account of the Prescott Fire Department group to offset increased pension liability.”

RED FOR ED IMPACT

State Sen. Karen Fann, who sponsored the original bill seeking $7.5 million for the pensions, said this week that the bill appeared well on its way to approval in the final months of the 2018 Arizona legislative session.

Then came the April/May wave of support for Arizona education (Red for Ed), which effectively swept away the Hotshot appropriation.

“All in all, I’m glad we were able to find the revenue to get the teacher salaries up, but there were things swept,” said Fann, a Republican from Prescott.

Prior to the Red for Ed campaign, Fann said she had been optimistic about the chances of success for her Hotshot-pension bill.

“I had already negotiated the deal, and we had just found out our revenues were up,” she said.

Fann and Rep. Noel Campbell – also a Republican from Prescott – both say the sweeping of the $7.5 million Hotshot appropriation was a direct result of the ramped-up funding for education.

“The governor needed to find the extra revenue,” Campbell said. (Ultimately, the state budget included money for a series of raises for Arizona teachers).

After the removal of the $7.5 million from the budget, Campbell says he opted to hold out for something for the Hotshot pension costs, if not the entire appropriation.

As the budget was nearing a House vote, Campbell said he informed Speaker J.D. Mesnard that he would be a “no vote” on the entire budget unless at least $1 million was included for Prescott’s Hotshot pension costs.

Later, Campbell said Mesnard told him $1 million was included in the budget, and Campbell voted for the budget.

Fann credits Campbell with “digging in his heels” on the matter and getting the $1 million into the state budget.

STATE RESPONSIBILITY

Fann added that if she returns to the State Senate next year, she plans to continue working to get the remaining $6.5 million into the budget to cover Prescott’s remaining pension costs.

“Obviously, it’s going to depend on our financials,” Fann said, but she continues to emphasize the state’s responsibility in the Hotshot pension costs.

The Granite Mountain Hotshots were defending state land when 19 crew members died fighting the Yarnell Hill Fire in June 2013. “Why should the City of Prescott bear all of the brunt (of the pension costs)?” Fann asked.

The $7.5 million appropriation bill that Fann sponsored in late January 2018 emphasized that point, as did a similar appropriation that the State Legislature approved in 2013, after the Hotshot tragedy.

At that time, Fann said she and former Prescott Rep. Andy Tobin and former Sen. Steve Pierce worked on the bill that ultimately dedicated $5 million toward the PSPRS pensions for the six fallen Hotshots who had been permanent employees with the city.

At the time, $5 million was the estimate for the pension cost for the six permanent Hotshots, and the 2013 bill devoted $1 million per year for five years toward the city’s pension costs.

Meanwhile, four families of Hotshots who were originally considered to be seasonal employees by the city and therefore not eligible for PSPRS, won claims for pension benefits. That added to the city’s costs, as did a higher-than-anticipated pension cost for the original six Hotshots.

In all, Fann said, the city’s total Hotshot pension costs were estimated at $12.5 million. She proposed the $7.5 million appropriation to make up the difference.

The final $1 million payment from the original $5 million appropriation, along with this year’s additional $1 million, is scheduled to go toward the city’s PSPRS liability in July or August.

The money will offset the city’s $86.4 million unfunded liability with the PSPRS.

MAYER SCHOOL DISTRICT APPROPRIATION

Along with the $1 million appropriation for the Hotshot pension, Fann and Campbell say the state budget also included a $300,000 appropriation to cover a loss in student numbers that the Mayer School District suffered after the 2017 Goodwin Fire.

“When school districts lose students, they lose revenue, and this will make them whole for the year,” Campbell said.