Missouri Senate passes bill to fund sheriffs' retirement system
Sen. Rusty Black, R-Chillicothe, on the first day of the 2024 Legislative Session (Annelise Hanshaw/Missouri Independent).
A bill to fund pensions for Missouri sheriffs from new fees on court documents and a slice of the money the state pays counties to house prisoners passed the state Senate on a nearly unanimous vote Tuesday, potentially rescuing a retirement system that voters refused to support at the ballot in November.
Last year, lawmakers appropriated $5 million of general revenue to the Missouri Sheriffs' Retirement System and placed a measure on the November ballot that would have imposed a $3 fee on court cases to keep it solvent in the future.
The ballot measure was rejected by 61% of voters, leaving the 5% donation from sheriff's salaries in 114 counties and the city of St. Louis as the fund's only income. Those contributions totaled $89,502 in 2023, according to the system's annual report, while the system paid out $3.8 million in benefits to 147 retired former sheriffs, one disabled former sheriff, and 52 spouses. The administrative costs of the system were $244,454.
Prior to 2021, the retirement fund was supported by the court fee but the Missouri Supreme Court ruled that year that it was unconstitutional because it represented a hurdle for citizens to access the courts.
Sheriffs currently receive a $10 fee to serve papers in a civil case initiated by a private party, money that is deposited in a special fund to support increased pay for deputies. The bill would raise that fee to $15 in most counties and $20 in the largest, those of the first and second classification, with the extra money going to the retirement system.
The bill would maintain the contribution at 5% of salary, and shave $1.75 off the daily amount the state pays for housing prisoners convicted of felonies and sentenced to a term in a state prison. The state currently pays $24.95 per day and whether that amount will be increased by 50 cents per day is an issue to be decided in state budget negotiations.
Sheriffs in counties of the first and second classification are paid 80% of the salary of an associate circuit judge, or $130,720 for the year. In other counties, the salary is calculated as a smaller percentage of the judicial salary, based on assessed value of property, with the lowest being about $70,300 per year.
There is an exception among the larger counties. Dwayne Carey, the sheriff of Boone County, is paid $174,116 annually because of an anomaly in how the pay was established and a legal inability to reduce it during his tenure in office.
State Sen. Rusty Black, a Chillicothe Republican handling the House-passed bill in the Senate, said the bill will put the system on track to pay all its current and future obligations. The fund, he said, currently has about 70% of the money it needs, based on estimates of future market returns and contributions.
'With these three legs on the stool, jail reimbursement, sheriffs (contributions), and then the processing fee, hopefully we're going to raise, the estimate is, somewhere around $3.8 million,' Black said.
That would make the system fully funded in about 20 years, he said.
The bill needs a final vote in the House before going to Gov. Mike Kehoe for his signature.
The budget that must be passed this week also includes $2 million more from state general revenue to keep the system afloat. The budget language also includes a prohibition on using pension system funds for political contributions, a reaction to the fund donating $30,000 to the unsuccessful ballot measure campaign just weeks after receiving the infusion of state cash.
The bill began in the House as a proposal to limit the impact of a court judgment on retirement benefits for members of the St. Louis Police Department.
The bill has grown to also include:
Provisions banning state-established pension funds from making investments where environmental, social or governance concerns influence financial decisions 'in a manner that would override…fiduciary duties';
A ban on pension fund investments in Chinese securities and the withdrawal of funds from pooled investments that include shares in companies based in China or controlled by its government or ruling Communist Party. Funds would have until 2028 to comply;
A requirement that Kansas City police officers retire at age 65 or after 35 years on the job, whichever is earlier.
The bill required portions of two days to debate in the Senate, where a provision doubling a pension tax exemption for lower-income retirees was stripped from the bill. The tax cut would have reduced state revenue by about $140 million annually.
Democrats questioned several provisions. State Sen. Stephen Webber, a Columbia Democrat, said he was surprised to see the provisions barring investment decisions based on governance next to the provision banning investments in China because it is out of political favor.
'I can see both pieces making sense,' Webber said. 'It's just weird to see them both together.'
'That's where you and I work,' Black replied. 'Some days, bill after bill, they all lay together and it seems like we'll all be singing Mary Poppins songs and flying with an umbrella. And then sometimes we end up with stuff like this, that right one right after another in a spreadsheet, and they seem opposite of each other.'
The failed ballot measure would have also authorized a court fee to support the pensions of elected prosecutors.
'Do you think that's probably the last fix we'll need on the sheriffs for a while?' state Sen. Tracy McCreery, an OlivetteDemocrat, asked Black.
'I hope so,' he said. 'Prosecuting attorneys are next in line.'
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