Even some progressives are finally beginning to grasp how lavish public pensions crowd out government spending for other liberal priorities.
Last month, The New York Times shined a light on Oregon’s government retirement system, which includes more than 2,000 former workers who rake in six-figure pensions each year for life. One ex-worker, an eye surgeon who retired recently as head of the Oregon Health &Science University, takes home $76,111 — a month.
“Oregon — like many other states and cities … — is caught in a fiscal squeeze of its own making,” the Times reports. “Its economy is growing, but the cost of its state-run pension system is growing faster. … Its experience shows how faulty financial decisions by states can eventually swamp local communities.”
Nor can the state simply keep raising taxes on private-sector workers to cover the higher costs — they’ve tried that, the Times notes, but it never seems to be enough. As a result, difficult choices must be made, and there is less money to be spent elsewhere. “Local residents might not know why,” according to the story, “but they are paying more taxes and getting scantier services in return” as a result of extravagant public pension obligations.
The report should serve as a cautionary tale for Nevada. Democratic lawmakers in the Silver State have long resisted efforts to reform the state’s Public Employees Retirement System — which has billions in unfunded liabilities — preferring to stand with government unions rather than the taxpayers who pay the bills.
And that’s the critical dynamic which escaped scrutiny by the Times. While the pension predicament Oregon and other locales now face may indeed have been, in part, the result of “faulty financial decisions,” the primary culprit is the cozy relationship between liberal politicians and the labor organizations that represent government workers.
It’s an incestuous, circular system. The unions stuff dues money (derived from taxpayers) into the pockets of progressive politicians to help them get elected and stay in office. Those officials, in return, advocate for higher pay and benefits — including cushy pension plans — for government workers. Rinse and repeat. Both sides enrich themselves courtesy of the taxpayer.
To wit, the Times reports that — incredibly — when Oregon lawmakers passed a measure requiring retired government workers to pay the state’s 9 percent income tax, “they also increased pensions by 9.89 percent, giving retirees extra money to pay the tax.”
Absent changes — transitioning government pensioners from a defined-benefit to a defined-contribution system, for instance — a taxpayer rebellion looms. “It’s an affront to everyone who pays taxes,” one retired Portland carpenter told the Times. “At every step of the way, they’ve made decisions that went against the interests of the public.”
It’s worth asking: Who are the politicians resisting public pension reform — most of whom are on the left side of the aisle — actually representing? The answer is obvious.