Pensions a Heated Political Issue

Police riot in Ecuador over compensation!

Earlier in the year I wrote an article entitled Canadian pension news headed for top spot in 2010

It turns out that it indeed pensions are a very big issue in the news this year. A recent article confirms the importance of pensions on the political scene and provides a good assessment of the current situation. Pensions become a heated issue in 2010 politics

Pensions aren’t exactly a staple of election year politics in America. But after three years of heightened attention to the underfunding of public pension systems, candidates across the country are offering a variety of proposals to strengthen financing. The debate is certain to carry over to the 2011 legislative sessions that begin in January.

On the state level, public pensions are a key issue in the race to succeed Governor Arnold Schwarzenegger, a Republican who was one of the first elected officials nationally to recognize the depth of the pension funding problem. His proposed reforms, which included rescinding a benefit increase, failed in part because of opposition from California’s strong public employee unions. 

Battle for entitlements!!! 

The battle is one where the public sector is unprepared to give up its gold-plated taxpayer-funded defined benefit pension plans. 

This week in Ecuador there was a Golpe de Estado or Coup Detat as the President was kidnapped. He was kidnapped by policemen who were angered over the government cutback of their wages and bonuses. The army fortunately supported the President and rescued him safely. It seems that public sector employees refuse to give up their entitlements.Ecuador recovers after police rampage against pay cuts

Read the comments from Governor Arnold Schwarzenegger in the previous section (they are referenced in links). He clearly outlines the problems of these pensions for taxpayers and the barriers to reforming these pensions. 

Schwarzenegger's comments are repeated by a very astute county executive who in Milwaukee County presented the county budget. Walker has a message on several issues that all politicians should here. However, he is especially accurate on the pension and public sector compensation issue.

Create Balance between Public and Private Sector Benefits
Now, probably the most critical part of this budget addresses the need to create a balance between the benefits received by public and private sector employees. We can not and should not maintain a system where public employees are the “haves” and the taxpayers footing the bill are the “have-nots”.

Wages and benefits comprise more than 49% of the county budget, and the cost of benefits is growing at an alarming rate. Delivery of necessary services will be affected if these costs are not controlled. We can not simply tax our way out of the challenge.

Many private sector workers in the county are seeing their wages and benefits frozen or cut to preserve jobs. Retirement contributions have been suspended and employee contributions for health care have increased. It is hard not to expect the same from those in government. Just ask the employees at Harley-Davidson.

This budget again includes the wage and benefit reforms adopted in the 2010 Budget.
While we have taken actions in the past to help control costs, we must take additional steps to help balance the escalating cost of public employee benefits for taxpayers, now and in the future.
This budget includes major reforms such as:

· Asking county workers to make the employee contribution to the pension system,

· Ending the step increase for wages,

· Redesigning the healthcare plan for non-union employees and retirees to lower costs, and

· Eliminating furlough days for employees who helped balance the budget with the wage and benefit reforms.

I want to thank the unions and the non-represented employees who helped balance the budget by accepting reasonable wage and benefit reforms. This budget protects their jobs and relieves them from furlough days.

For those who do not help the county balance its budget, we include a fall back provision. If the wage and benefit reforms are not met, the 2011 budget will be balanced with furloughs and potential layoffs. Public safety and direct patient care will continue to be exempt from these potential changes.

In tough times, people all across our county are making sacrifices to keep people working. County government should be no exception. Together, we must hold firm and make the tough decisions that will ultimately make Milwaukee County stronger.

This is very impressive, a politician who is not afraid to say what everyone knows.

Bill Tufts

Fair Pensions For All