State employees should pay for pensions
Governor Malloy and the state employee unions have agreed to try to make the state employee pension fund solvent by taxing people in the distant future by billions of dollars. The money will cover obligations to state employees who will have retired years before those future taxpayers are even born, taxpayers who will have gotten no benefit from the work done by the pensioners.
There are only two other options for restoring the pension fund — one the Malloy administration can talk about and one that nobody in state government will talk about.
The first would be to deposit a lot of money to the pension fund quickly, either by diverting to the fund as much as a third of the state budget, thereby eliminating a huge amount of public services, or by imposing more heavy tax increases even as the state’s economy continues to decline under recent tax increases.
The second option, the unspoken one, would be to make state employees pay for their own pensions as most private-sector employees do. Most state employees now contribute no more than 2 percent of the cost of their pensions. The co-payment could be vastly increased or state employee compensation could be sharply reduced and the savings deposited to the pension fund. Simultaneous with this, defined-benefit pensions for government employees in Connecticut could be prohibited for new hires. (The latter action is something a few Republican state legislators can talk about.)
The public interest is plainly in the unspoken option. In addition to saving money for taxpayers now and forever, it would proclaim that the comfort of its own employees was no longer state government’s highest objective.
The problem is that in Connecticut, as throughout the country, the public pays so little attention to its own interest. For as the journalist James Reston observed, all politics is based on the indifference of the majority. Meanwhile in Connecticut the ruling political party, the Democratic Party, is based on government employee unions.
So the governor has chosen to mortgage the state for decades to achieve the satisfaction of the unions, no matter how ridiculous the rationale, as articulated by Salvatore Luciano, executive director of Council 4 of the American Federation of State, County and Municipal Employees. “Real pensions,” Luciano says, “play an important role in Connecticut’s economy by supporting jobs and generating purchasing power in our communities.”
Yes, just think of how prosperous Connecticut would be if it took even more money from the great majority and transferred it to a politically influential minority, the people employed by state government. Just think of the increased purchasing power of that minority.
Do not think of the diminished purchasing power and the diminished pensions and savings of the majority and the net reduction in their standard of living.
In Connecticut transferring wealth from the private sector to the government class is always the preferred policy.
At least the indifferent majority will have a little more opportunity to get motivated thanks to state Comptroller Kevin Lembo, who has just put on the internet (www.osc.ct.gov/openCT.html) the state government employee salary and pension database, along with other state budget data.
Even so, much more transparency is still needed, like repeal of two impediments to freedom-of-information law: the provisions that prevent disclosure of teacher evaluations and allow union contracts to nullify the application of transparency law to the personnel files of college professors even when they keep getting arrested, a provision highlighted by the recent case of a professor at Central Connecticut State University.
Chris Powell is managing editor of the Journal Inquirer in Manchester.