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Sponsor says bill to ban taxpayer‑paid pension 'pickups' will increase transparency
Summary
Representative Thomas told the committee House Bill 473 would prohibit public employers from paying employees' share of pension contributions in new contracts, saying the practice obscures total compensation; the bill follows a vetoed budget provision that would have banned pickups for school administrators and would apply the ban more broadly to
Representative Thomas presented sponsor testimony on House Bill 473, which would prohibit public employers from picking up employees' pension contributions in any new collective‑bargaining or employment contract signed after enactment.
"This bill is for the working class, for transparency. It's for our taxpayers," Thomas said in opening remarks, framing the measure as a way to make total public‑employee compensation more visible to taxpayers. Thomas said the practice of employers paying employees' pension shares can reduce headline pay but still increase taxpayer costs through employer contributions and related tax gross‑ups.
Witnesses and committee members discussed several practical and fiscal questions. Thomas said the measure would not break existing contracts; it would apply to contracts negotiated after the law takes effect. Committee members asked whether prohibiting pickups would force employers to raise base pay to remain competitive; Thomas replied that some employers already move total compensation to hourly wages rather than fringe benefits and said the change would encourage that transparency. Members sought a fiscal estimate; Thomas said the Legislative Service Commission would provide analysis and that he had not yet received a comprehensive statewide fiscal tally.
Committee members and witnesses also discussed the payroll practice known as "pickup on pickup," in which an employer pays an employee's contribution and then grosses up that amount to cover the employee's tax liability. A committee member offered a numerical example in which a $10,000 employer pickup could be grossed up to $12,500 to cover taxes in a higher bracket.
The hearing included discussion about the 2025 budget provision that would have banned pickups for school administrators, which the governor vetoed; Thomas said his bill broadens the ban to include all public employees rather than a single class. Committee members requested LSC fiscal analysis and said they would consider the bill alongside other transparency measures already under discussion.
No vote was taken; sponsors concluded first hearing testimony and committee questioning.
