A local newspaper recently lauded
the state and municipal workers who participated in the snow removal after the
recent mammoth storm here in Connecticut. The paper commented that people
should remember their heroic efforts whenever they think of complaining about
the compensation and benefits of these and all public service workers.
I’ll go one step further and say
that not only should public service workers be adequately compensated but also
that there should be more policemen, firemen, teachers, and snow removal teams
on the state and municipal payrolls. The fact that state and municipal services
are under-staffed can be directly related to the overly generous benefit
packages that have been negotiated over the past few decades.
For example, when a fireman in the
town of Fairfield retires, his pension benefit will be 80% of his final year’s
pay. So if his final year’s pay was $100000, his pension will be $80000 per
year for the rest of his life even if he retires as early as age 55. In other
words, he collects $80000 for not working while his replacement in the same job
gets only $100000 for doing the actual work. There are thousands of state and municipal employees in Connecticut whose pensions are greater than the salaries of the young workers who have been hired to replace them.
Some will say that the fireman has
paid into his pension over his working career but there is no way that his own
contributions would have provided the amount needed to provide an annual income
of $80000. At 4% interest it would take $2 million dollars to provide $80000
per year. Both the state and municipal governments have to provide for the cost
of these pensions every year and they are squeezing the public coffers so dry
that either new workers are underpaid, or even sacrificed when budget cuts have
to be made.
I am not suggesting that workers
be deprived of their pensions but only that these pension benefits are overly
generous. Who in the private sector can expect to retire on 80% of their
highest year’s salary, For most of us Social Security benefits are based on our
average pay over 30 years. A private sector employee earning $100000 can only
expect to receive about $30000 per year from Social Security, and will have to
wait until age 67 to collect.
These overly generous pensions are
stifling government at every level. The Postal Service just announced that it
will eliminate Saturday delivery, but if it weren’t for unfunded pension
obligations the Postal Service would be solvent. Cities in California are going
into bankruptcy because of unfunded pension liabilities. Here in Connecticut
state aid to municipalities is being cut but the Governor has resisted any
attempt to reform the Pension system.
It has been argued that negotiated
contracts require these pension benefits and that these contracts are sacred.
Yet, in most cases the contracts have been negotiated either by politicians who
either were either too ignorant or uncaring about future financial liabilities,
of just too self serving about their own personal and political needs. What
incentive did Connecticut’s legislators have to negotiate on behalf of the
taxpayer when they themselves gained virtually every benefit they gave to
public service employees?
Andrew McDonald (left) accepts nomination Governor Malloy on right |
A good example would be Andrew Mc Donald, the Governor’s long
time friend, who was recently appointed to the State Supreme court. As a
legislator he earned $35000 per year but participated in the State retirement
plan. When the Governor made him his Chief Attorney, his salary jumped into the
six figure realm. Now as a judge, he will earn $146000 per year but a State
commission has recommended that judges’ salaries jump to $192000 per year by
2017. If and when that happens, Judge Mc Donald’s pension will be based on his
judge’s salary and not what he made or contributed as a legislator. If he retires
after 25 years of total state service his pension could exceed $90000 per year.
What incentive did he have during his eight years as a legislator to rein in
these out of control pension liabilities? ###
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