Thursday, July 27, 2006


Tea Party Redux: State Pensions in Turmoil



Is a modern Boston Tea Party soon to come? Will taxpayers say "enough" to what they perceive as generous municipal pensions while they struggle to save?

The Associated Press reports on July 21, 2006 that "Oregon's state pension board plans to ask about 1,900 retired government employees to repay an average of nearly $28,000 each. They are among 125,000 workers and retirees whose benefits will be cut as a result of a successful lawsuit filed by local governments who argued that the pension board put too much money in benefit accounts in 1999." Apparently, state employees will bear the brunt if retirees are loath to return the funds (though taxpayers ultimately finance salaries and benefits of existing and retired workers).

Moving east, a July 20, 2006 announcement from Albany has New York Governor George Pataki vetoing a bill "that would have allowed teachers and other government workers with 25 years of experience to retire at 55 with the benefits now available at 62", costing taxpayers more than $195 million over the next seventeen years.

Whether municipal benefits are excessive is hard to say. To be fair, many government workers accept lower than market salaries in exchange for better benefits. That being said, times are tough and it will become increasingly difficult for state, county and city employees to get much sympathy from individuals who have their own retirement crisis to solve.

Instigator of the now famous tea toss, Samuel Adams offered: "It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds." On the opposing side, British Admiral Montague countered: "You have got to pay the fiddler yet!"

Nothing is ever free. Someone, somewhere, somehow, pays the bill. How will politicians respond? After all, grumpy taxpayers tend to vote.
posted by Susan Mangiero at 7/27/2006 01:21:00 AM