So Future, Potential Tax Revenue (i.e., Private Income) Is and Has Been the Property of Public Labor?
Eight public labor unions filed suit Wednesday to stop the implementation of minor changes made last year to public pension eligibility guidelines. The basis cited for the claim is revealing.
Calling the changes a “taking of property without justification,” the unions are asking that the changes be declared unconstitutional, that lost benefits be restored and that the state pay for the unions’ legal costs.
The pension system consists of past and future contributions by employers and past and future contributions by employees, together to be amplified (hopefully) by investment instruments. However, as has been noted here and elsewhere, employer contributions have not been made as required; accordingly, the pension system is not sitting fully funded in a lock box. And even if it were, defining it as the property of current and future retirees still seems far from the mark.
The only way that the current Rhode Island pension system can play out as envisioned by the politicians who promised these pensions and then failed to properly fund them is via the appropriation, over many years, of a seriously non-feasible amount of taxpayer money. The only way that these eight labor unions can make the far-fetched case that public pensions are their “property”, then, is if they are laying claim to the private sector funds that may or may not materialize over the next couple of decades in the pockets of taxpayers who may or may not even be here to surrender those funds.