State Pension "Fix" Not Worth a Tinker's Dam*

Ralph Long exposes the empty, crossed-finger promises in the state employee retirement bill.

You know, the one that General Assembly members are breaking their arms patting themselves on the back over. The one that allows Governor Steve Beshear to claim that his first legislative session was not the complete catastrophe it actually was.

The one that kicks a $42 billion - that's Billion, boys and girls - pension deficit down the budget road for our children to pay out of their hides.

The bill was loaded with weasel words that allow the legislature to back out of any commitment.

Sen. Tom Buford, R-Nicholasville, was the lone lawmaker to oppose the bill. He warned that the legislation is a mediocre first step that doesn't do enough to keep the retirement system from draining the state government's coffers in the future.

”If our goal is to achieve mediocrity in the pension plan, we have succeeded,“ Buford said.

The net result of the bill was to screw the workers and retirees a little bit while the Legislature doesn’t bite the bullet and do the right thing.

For the record, I think cutting the cost of living raise for retirees by 70 percent and increasing the minimum number of working years required for retirement for new employees by 12 full years to be more than a little screwing. Don't get me started on what a real labor leader like Walter Reuther would have gotten.

Long notes that the gnat of a bill the General Assembly strained to produce was at least not as bad as Senate President David Williams' plan to scrap defined benefit pensions in favor of the 401k plans on which millions of private-sector retirees are starving.

The third approach would be for the General Assembly to pass comprehensive tax reform and generate enough revenue to meet the obligations to state employees.

But the odds of the General Assembly summoning up the collective backbone to do such a thing is doubtful. These folks couldn’t pass a cigarette tax increase when it was not only the right thing to do but was supported by most of the voters.

And don't think people who don't work for state government are off the hook: State governments are constitutionally required to honor their pension commitments. The General Assembly has to come up with the money to pay state employee pensions even if it has to raise taxes 100, 200, 500 percent.

Every single day that the General Assembly and the governor postpone the inevitable tax increase the state pension deficit requires right now, the higher and more painful that tax increase gets.

* Tinker's Dam.

Cross-posted at BlueGrassRoots.