GOP afraid of public employees

By one calculation, Ohio’s five public pension plans have unfunded liabilities of $66 billion. And yet, the Republican controlled General Assembly isn’t going to adopt an overhaul plan until after the November general election. Why? Because the GOP does not want to risk angering public employees the way it did last year with Senate Bill 5, the collective bargaining reform law.

The overwhelming rejection by Ohio voters in November of SB 5, which was pushed through by Gov. John Kasich and his allies in the Legislature, was a major political defeat for a party that had swept the statewide elections a year before.

The message from the state’s public employees and their Democratic Party supporters was powerful in its simplicity: Don’t mess with us.


That is why the legislation to prop up the four largest retirement funds won’t be enacted until after the Nov. 6 general election. Republicans don’t want to risk a backlash from the 300,000 public employees when there is so much at stake with the presidential election.

Ohio is a battleground state, which the presumptive GOP nominee Mitt Romney must carry in order to defeat President Barack Obama. No Republican has won the White House without winning Ohio.

Therefore, the state and national Republican party leaders are not only determined to bring out their followers, but are attempting to depress the Democratic Party vote. Hence, the effort to make it difficult for blacks, the elderly and the young to vote in November.

But even if action on the public pension rescue plan is postponed until after the general election — the Senate passed the measure last week, but the House won’t take it up any time soon — public employees should not be lulled into a false sense of security.

They should remember what Senate Bill 5 was about: stripping public workers of their collective bargaining rights.

Indeed, making Ohio a right to work state is GOP’s ultimate goal.

The decision by the House not to push for enactment of the pension reform bill clearly shows the extent of Republican hypocrisy.

The conservative think tank, The Buckeye Institute for Public Policy Solutions, issued a report last December titled, “Hanging By A Thread.” The study placed the total unfunded government pension liabilities at $66 billion.

“Ohio’s five defined-benefit public-pension systems are broken,” the study stated. “What began as a method of providing decent retirement benefits for public employees has evolved into a fiscal nightmare of red ink, runaway liabilities, and for many government workers, pension packages well north of $1,000,000. Ohio’s public employees and taxpayers deserve public-retirement systems that provide fair benefit levels to retirees at reasonable cost to taxpayers. Neither of those two principles is being fulfilled. Gold-plated pension packages and billions in unfunded liabilities is not what Ohioans bargained for.”

So, what should be done to make the systems financially stable?

The Buckeye Institute study noted there are two divergent paths Ohio legislators can follow when they deliberate the pension reform legislation. One aims at minor adjustments, such as increasing service-length requirements, retirement age, and Final Average Salary calculations.

No major changes

The study contends that while such measures will strengthen the pension funds temporarily, they won’t fundamentally change the structure of the defined-benefit system.

The other path is to move toward a defined-contribution-style retirement system.

“Like those found in the private sector, defined-contribution retirement systems place less risk on the backs of the taxpayers while allowing for significant cost savings,” the Buckeye Institute contended. Government workers would have to take on some risk, but under the current system they bear none. Taxpayers would be expected to cover the unfunded liabilities.

But that necessary discussion will not be held any time soon in the GOP-controlled General Assembly.

Indeed, after the defeat of SB5, Gov. Kasich argued there were aspects of the bill that have popular support among taxpayers in the private sector, but he has not weighed in on the pension reform legislation. It’s all about politics.

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