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GOP afraid of public employees



Published: Sun, May 20, 2012 @ 12:00 a.m.

By Bertram de Souza (Contact)


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.

Backlash

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.


Comments

1NachoCheese(163 comments)posted 2 years, 4 months ago

Hmm... isn't it odd that these public employee pension funds are at risk? Kind of ironic, seeing how these same public employee unions have practically bankrupted our cities, towns, and especially school districts throughout Ohio. Looks like you reap what you sow.

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2theotherside(333 comments)posted 2 years, 4 months ago

The Buckeye Institute is an extremist organization that has an agenda against public employees. Period. To cite them as the know all end all on public pensions is folly. Do your homework Vindy. From STRS:

Earlier this month, the Buckeye Institute issued a misleading report entitled, “Taxpayers on the Hook: Taxpayer Contribution Rates for Ohio Government Pensions Outpace National Averages.” The report claims STRS Ohio’s 14% employer contribution rate is the ninth highest rate out of 34 states with similar teacher retirement programs. STRS Ohio employers do not contribute to Social Security by state law, making the STRS Ohio pension the only source of retirement income for Ohio’s educators. In reality, STRS Ohio’s employer contribution rate is below the national average when you factor in the Social Security contribution rate of 6.2% that 22 of those states make on behalf of their public educators. The report only listed the amount those states contribute to the state retirement system and failed to include the additional amount that is contributed to the Social Security program.

A more fair and accurate comparison would have noted that when the Social Security contribution is factored in, STRS Ohio’s 14% employer contribution rate ranks 20th out of the 34 states in the report. Among the 12 states that do not participate in Social Security, STRS Ohio’s rate ranks right in the middle:
Illinois 24.91%
Louisiana 23.70%
Connecticut 19.20%
Maine 17.28%
Colorado 14.75%
Missouri 14.50%
Ohio 14.00%
Kentucky 13.11%
Alaska 12.56%
California 10.27%
Massachusetts 8.50%
Texas 6.64%

Of the remaining 22 states that contribute to both a public retirement system and Social Security on behalf of their public educators, 18 of those states contribute more than 14% in combined state retirement contributions and Social Security contributions.

The Buckeye Institute report suggests that 401(k)-style retirement plans are a better alternative for Ohio’s public employees, but study after study shows that individuals enrolled in these plans are ill-prepared for retirement, as untrained, individual investors earn a significantly lower return than the professional money managers at public pension funds like STRS Ohio. It’s clear that defined benefit plans offer a greater retirement benefit at a lower cost.

These continued and unwarranted attacks on Ohio’s public pension funds and their defined benefit plans are sure to continue until the Ohio Legislature takes action on pension reform proposals that are currently on hold. Defined benefit pensions give members a retirement they can count on and stoke — rather than drain — Ohio’s struggling economy. STRS Ohio paid more than $5.5 billion in benefits during fiscal year 2010, with much of that money staying right here in Ohio, being spent on goods and services throughout the state — and that’s something all Ohioans should be thankful for.

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3chuck_carney(499 comments)posted 2 years, 4 months ago

State employee should get no better salary, retirement plan and other benefits than the average, six-pack joe worker. I can't continue to afford the increased growth of government and the burteaucracy.

State employess just don't understand us.

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4DwightK(1256 comments)posted 2 years, 4 months ago

You know Chuck, the problem may be that too many people aspire to be average. Teachers, firefighters, police and corrections officers don't have average jobs. They deserve to know they have a decent pension at the end of their service.

If the average joe six pack doesn't like their job they are free to improve their skills and get another.

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5fd6636(255 comments)posted 2 years, 4 months ago

Remember when ........... when BEFORE the economy tanked, and many, and I mean many private sector workers were "raken in the dough" and really didn't care about public employees, what they did or made, and some even laughed at our "tiny" in comparison pay scales and pensions???Things were good! So, corporate greed took its place, Wall street just about tanked our country thru reckless and bias based investments, companies down sized or closed, Insurance companies ran amuck with no one to be accountable to, and now you feel its public employee wages and pensions thats choking the state and nation??? Really? Sounds to me its the ones who were at one time "entitled" now, are jealous of those wages and pensions that NOW seem appealing, Right??? Now, "they" want what they could of had at one time, but wouldn't stoop as low as to have one of "those" jobs!! Sound familiar to some of you out there? Heres how I see it:" If we cant have it, they cant either!! "Seems like "whinning"to me. Does it seem like I'm ranting? read it again. Does it sound like somthing some of you said or felt towards public employees at one time or another?? You bet ya!! Coulda , woulda, shoulda.......... we all chose our paths in life. Dwight K. gets it.

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6chuck_carney(499 comments)posted 2 years, 3 months ago

Youngstownbornraised and Dwigtk, you just do't get it to paraphrase a now famous VP. I'm so happy that you probably back the 1% and the Wall St. fat cats.

i believe it's a question of fundamental fairness when viewed in light of the overburdened taxpayer aka the average joe six-pack who works at the factory all day long work low wages and benefits to feed his family. Obviously something you've never had to do since feeding from the public trough.

it's the same unfairness as the US Congress exempting themselves from Obamacare in order to avail themselves of blue chip health care which is not available to joe six-pack.

Notice I didn't resort to name calling. You start calling names when you have a weak argument

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7theotherside(333 comments)posted 2 years, 3 months ago

Again, Toy, you are right about the bias. The Buckeye Institute's purpose is to destroy public sector unions by swaying public opinion against public sector unions. More of the same right wing extremist agenda that has started ever since the current crew got elected in Columbus in 2010. That certainly is biased. And the figure they are using of $66 billion dollars is inflammatory to say the least. They like that. It fits into their agenda. What they don't want you to know is that there is bi-partisan legislation already passed through the Ohio senate and awaiting action in the Ohio house that addresses that short fall. All without costing the taxpayers another cent while at the same time decreasing retirement benefits and increasing eligibility rules. With the support of the majority of the systems members. Why doesn't the Buckeye Institute want you to know that? Because of their biased agenda and ulterior motives. They are a mouthpiece for right wing, tea party, extremists. Don't believe anything you hear and half of what you read.

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8theotherside(333 comments)posted 2 years, 3 months ago

The amount does matter. That's why the systems are seeking legislative changes to address the shortfall. With the support of the majority of the members in those systems. That is responsible fiscal accountability seems to me. But the agenda of groups like the Buckeye Institute need to be exposed and their vitriolic propaganda which is driven by extremists needs exposed as well.

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9fd6636(255 comments)posted 2 years, 3 months ago

the Buckeye institute is nothing more than a cover for the right winger tea partier extremists who wish to have ALL control on every aspect of your lives.If you don't have the same thoughts and policies as they do, your out!! Does this sound foreign countrish to you?? Those who do not have some of those benefits are extremely jealous of what someone else has, even though they have more than most. I know for a fact that police and fire pension system has made changes so they can have a thirty year solvency window. Most if not all members recognize that changes were needed, and accept this. I can't stand those "entitled" who will have more than we will ever have (Republibs majority) , and will fight the working man until he's on his knees, won't happen!! I thought we in Ohio had a eight BILLION dollar debt, now this has all been erased, and now we have a rainy day fund. Really? And the republibs did all this with out SB5, yes that SB5, the same bill that kasich said was the main cog in reversing debt, and with out it, recovery would be IMPOSSIBLE! Remember after it's defeat, the republibs came out and said "Well, maybe our debt wasen"t as large as we first thought". Who's lying?? Ya wanna know who?? the same right wing extremists who back this 66 Mill. BS story that the repubibs are sticking to in the state house, thats who. But, I'm game. If we shall deplete our pension and benefit packages, I'll go for it as long as those in Columbus in the Majority go first! .................. Thats what I thought! You see folks, it not about ecomonics as we proved with the trouncing of SB5, ITS ALL ABOUT THE ALL MIGHTY POWER OF CONTROL!

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10fd6636(255 comments)posted 2 years, 3 months ago

Im not saying all is well, according to the republibs, all is wrong, but, they do not produce solid stats to back up their facts. Its based on one study by a group who has a large track record of disliking labor unions. Also, The pension boards who represent public employee unions have been in talks with their memberships across the state making changes that the public wanted during the SB5 fiasco. More contributions, more hospitalization pick up when retireing, longer years of service, more years added to figure a average for retirement benefits. these changes are all being placed into effect either now, or in the future. These are what the taxpaying public wanted, and most heard them.

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11fd6636(255 comments)posted 2 years, 3 months ago

Also Cannon. Yea, everybody at the same time, same pension. But, that would level the playing field. Do you think for one minute that an entitled CEO of some company who was given control by his rich family would even think of being in the same pension system as some dumb flaslight carring beat cop?? And now their into state office. Do you think the pension system would stay fair? again, The powerful would minipulate the system to fall to their side (WAll St.). I would love a fair, equatible system of a pension for everyone, but I dont think it would or could exist. And, yes as I stated I would vote for pension changes, for the better of everyone, not a few. This is where the problem with the extremist republicans falls into. They feel they are elite and thus, represent only the very few and powerful. This, my friend, is my problem with "their" system. Remember Cannon, the Gov, all his henchmen and woman, and all his support staff are all on the public coffers just like police officers, teachers, Firefighters. So, If they agree to a 401, and all the cuts and provisions that the buckeye state that we need to be solvent, so be it......... (But I don't think they will.) That would make them..... well, .common.

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12theotherside(333 comments)posted 2 years, 3 months ago

toy, you are trying to put words in my mouth. The Buckeye Institute is using that figure to inflame public opinion. I didn't say it was correct or incorrect. And I agreed that reform is in order as has the members of the pension system. Contrary to what you think of public employees, they also care that the state is solvent. Why would they not? Because they want to lose their pensions? Please. And I do not hate anyone telling the truth. I do despise anyone who refuses to consider all sides of issues because they see some advantage in exploiting real or imagined weaknesses in opponent positions. Yes, that I do hate. And the Buckeye Institute is clearly a mouthpiece for extremist, right wing, tea party driven agenda. Their agenda isn't to try to fix public pensions at all. They want to eliminate them because of the ongoing privatization efforts by them and groups like them. They see profits and don't want funny little things like state law in the way. The legislation isn't hard to find but since you asked, here is a start from STRS:

https://www.strsoh.org/HTML%20News%20...

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13fd6636(255 comments)posted 2 years, 3 months ago

Agreed Cannon. Hate is there, and it runs deep. When Kasich came into office, there was no discussion with unions, no compromise with anyone. "Get on the bus, or get run over by it" Do you remember this statement by Kasich Toy Cannon? Well, I do. I have NO faith in the Republican based political party in this state, and for that matter this country. Ant attempt of reform in my eyes means cuts to the working man.Cuts to unions, and middle class means unbalance of power. No one said there is nothing wrong. The pension system as it stands needs adjusted. This, in most pension boards is being addressed. The buckeye report, is a biased, one-sided, anti union report based on tea-party requests to squash unions. There is no "other side" of this issue. no "what are the public pension boards doing to remedy the situation." Just, attack, and kill. Period. Search and destroy. Shock and awe. Privatize. Make everything private. give kick backs to the "fat Cat" owner of the "corporation." Yea, Hate the "other side". No trust, Remember SB5?? I remember it like it was one hour ago! When a radical group Uses the banner of "good for all", but benefits a very choosen few, Its hard to believe anyone of them!

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