Local Government
Commentary: Mounting Headlines are Fuel for Pension Reform Movement

Commentary: Mounting Headlines are Fuel for Pension Reform Movement

By Joel Fox.

The public pension reform initiative campaign –if and when it comes, and it will– is being fashioned by the media. All proponents of a reform plan would have to do is make endless lists of the enormous payouts and mismanagements of the pension systems that seem to be reported daily. Put the lists on mailers, on billboards, in commercials… then ask the question—what is your pension look like?

An additional key, of course, would be to have the resources to spread the word and that’s the rub for reformers. But there is no question if you read the headlines the material is there.

Usually an issue like changing pension rules is a hard sell. Voters are empathetic to workers. They put themselves in the shoes of the person affected by the reform and say, “I wouldn’t want a cutback.”

Voters have even been willing to belly-up to the cash bar and throw in more money to save pension programs. Last year, voters in Houston agreed to support a $1 billion General Obligation bond to buck up the pension system, part of an overall reform the state of Texas put forth claiming it will save money in the long haul.

However, as the pension crisis deepens in California, voters will see cutbacks in services and face new taxes. A slew of tax increases headed for local ballots are all about dealing with the pension crisis. If that is made widely known in discussions over the taxes, it will add more fuel to the fire.

Meanwhile the press continues to put light on the pension situation.

Just this week the City of Martinez saw an article about its budget/pension problem. Last week it was Carpentaria and Marin County. (Video – Marin Coalition of Sensible Taxpayers) The Los Angeles Times ran a series of articles and an editorial about the Deferred Retirement Option Plan (DROP) that allowed retired police and firefighters to come back and earn a salary, continue with their pensions, and do so even if they then filed for disability and were not working.

Jack Dean who publishes the website Pension Tsunami has linked to 48,000 headlines in 14 years. “When I started monitoring this issue in 2004, it was barely on anybody’s radar screen. It caught my attention because of all the retroactive pension formula increases that were being granted in communities throughout the state in the wake of the passage of SB 400 in 1999,” Dean said. “As I expected, the growth of pension costs in state and local budgets has been gradually creeping up, and has really started skyrocketing in the past couple of years — especially after multiple CalPERS rate increases.”

Even causal observers to local public affairs have taken notice.

A few years ago, I was told by a public employee official that the public pension situation was a dead issue. If it was then, like Frankenstein’s monster it has come roaring back to life. The only way to finally put it away is to make substantial reforms to the system.

The mounting headlines will present an opportunity.

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