Seventeen Trips to the Dentist
Governor Dannel P. Malloy began his first of seventeen town hall meetings last night in Bridgeport, taking questions from residents on taxes, state spending, competitiveness, and more. The first questioner of the night removed his dentures, so perhaps it is appropriate that the task that Mr. Malloy has volunteered for is, in many ways, like going to the dentist seventeen times in a row. You might feel better when you are done but it’s going to be uncomfortable until then.
On the other hand, though, Mr. Malloy may wish he was getting a root canal instead of having to explain how a budget year that asks for $1.5 billion in new taxes does it without making fundamental changes to the way state government does business.
Reforming pension benefits is a good example. In a recent post, the widely-respected Jonathan Pelto aptly observes that the average pensioner receives the relatively modest sum of $31,900 from the state. It is an important point, especially with many citizens in this state under the misguided belief that state retirees receive handsome benefits as long as they continue to breathe.
However, that belief didn’t emerge from nowhere. According to the CT Sunlight Project, 175 former state employees received pension benefits in excess of $100,000 annually in 2008. The number swelled to 299 in 2009. Moreover, the top pensioner in 2009, the last year for which data is available, received $257,362.21 in benefits, so while people shouldn’t paint all state workers with the same brush, there is plenty to grumble about, too.
Here is the broader problem with pensions: most workers in the private sector usually don’t have a pension that guarantees them a percentage of their last three years’ salary. They save for their own retirement in a 401(k) or IRA that doesn’t guarantee anything. Why should taxpayers as a group afford to their employees benefits that they as individuals do not enjoy? So while it is and remains true that most pensioners separately aren’t the problem, together they represent an unfunded and unsustainable liability for the state.
Mr. Pelto stays on point when he notes that the real issue with pension benefits is that previous Governors and Legislatures punted on their responsibilities over the years and left the matter in its current dramatically underfunded predicament. But the actions of the past are already taken. Just like in Wisconsin or New Jersey or New York, new leaders are tasked with solving the problems created by those actions.
In acknowledging the difficulty of the task, Gov. Scott Walker in Wisconsin has started a national conversation about what is sustainable in the long run. The Wisconsin situation even has people thinking critically for the first time in a long time about the role of public employee unions. In his half-right, half-wrong piece on the subject, Time Magazine’s Joe Klein meanders into a cogent point on the subject:
Essentially, public sector unions have the ability to sit on both sides of the table–their managers are their employees: another profound structural dysfunction. In some larger cities, public employees make up a disproportionate percentage of all voters, an estimated 20% in New York (and, believe me, teachers are among the most assiduous of voters). It is no wonder that politicians of both parties in union states have gifted these unions egregious benefits, especially in areas–like work rules–that don’t show up in the budget.
The public edifice that has been constructed over the past decades is financially unsustainable in an economy that doesn’t perpetually grow and no economy does. The $2 billion in state employee concessions sought by Governor Malloy, then, should represent only a down payment on a far more structural reorganization required to make government sustainable in the long run.
After seeing the numerous state employees clamor for more benefits and higher taxes last night, though, seventeen trips to the dentist might not seem so bad after all.
