We Didn’t Agree to That
As Marc noted yesterday (and as we’ve been talking about for quite some time), Rhode Islanders are due to see their annual expense for public-sector pensions grow into the foreseeable future. I wonder how much issues such as this have contributed to the increasing disaffection with government.
Partly, that angst is a function of the feeling that there’s now a ruling class that cannot be dislodged from office notwithstanding our ability to vote. Partly, it’s the realization that the public-sector has insulated itself from the effects of the recession, at the expense of everyone else. (The supposed “stimulus” programs count, too). But pensions are a hard, cold fact that surely prods many private sector residents toward the opinion that our representative government doesn’t really speak for us, and that we are not really responsible for the promises that it makes.
From the second link, above:
Republican Governor Carcieri had urged the General Assembly to eliminate entirely the promise of any cost-of-living increase, leaving it to the General Assembly to decide how much — if anything — the state could afford to give its retirees in any given year.
But the Democrat-dominated General Assembly was unwilling to go that far in an election year.
That was a decision they made, and it’s easy to question — philosophically and practically — why they have such power over our money. Look at the language that even reporter Katherine Gregg uses (emphasis added):
To keep the promises state lawmakers have made over the years to more than 50,565 current and future retirees, the state will have to increase its contribution to the pension fund from 20.78 percent to 22.98 percent of payroll for employees.
And the pension system was built with such unrealistic expectations for a return on investment (8%, I believe) that the entire thing leaves the aftertaste of an illegitimate scam:
In their report, they noted the fair market value of the state’s pension portfolio had dropped from $7.88 billion to $6.07 billion during the critical 2009 period they looked at, the rate-of-return on the investment of these dollars was minus 20.1 percent that year and despite some good years along the way, the state’s “average market return for the last 10 years is 1.83 percent.”
At the state level, of course, residents can change their entire slate of representatives by moving. Those who remain may or may not be able to oust the old guard, whether or not the individual representatives change, but perhaps there’s reason to hope that more folks are asking themselves what “representative” ought actually to signify.