State budget expert: Special pension perks need to end (video)

State budget expert: Special pension perks need to end (video)

by
Dustin Hurst
January 25, 2012
Dustin Hurst
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January 25, 2012

(Note: This is the part 2 of a three-part interview with Bob Williams, president of State Budget Solutions.)

Bob Williams, president of State Budget Solutions, a think tank committed to promoting fiscal security among local governments, says it’s time for Idaho to end special perks within the pension system.

The perks Williams wants to end include pension-spiking by state lawmakers, allowing private institutions to take part in the retirement program and automatic cost-of-living hikes for beneficiaries.

Special pension benefits, Williams believes, elevate public employees over taxpayers and private sector workers. “It’s like there are two classes of people,” he said. “It’s not fair to the private sector.”

Williams, in town Tuesday to discuss reforms with state lawmakers, told IdahoReporter.com that it’s unfair to taxpayers to have state legislators earn huge pensions after long careers in the Legislature.

In Idaho, several former lawmakers have gone this route, including Sen. Joe Stegner, R-Lewiston, Rep. Debbie Field, R-Boise, Senate Pro Tem Bob Geddes, R-Soda Springs, and Rep. Bill Deal, R-Nampa, among others. Each of them was appointed to high-paying state jobs, which spike their public pensions by thousands of dollars annually. All they have to do is stay at the higher rate of pay for 42 months and they get a pension payday.

Williams says that perk needs to end soon. “You can’t have these outrageous things,” Williams warned. “Taxpayers can’t afford this.”

Another rub for the think tank head man is private union staffers taking part in the public pension program. Idaho law says that if a union’s employees and membership are paid by public sector offices, the group’s staff can participate in the state retirement system. The two most notable groups on the pension system are the Idaho Education Association and the Idaho Public Employees Association.

Williams believes because private unions aren’t working for the common good, they shouldn’t be allowed to participate. “It’s not fair that taxpayers are picking up for someone who doesn’t work for the state,” he said.

While the private unions pay for their employees’ contribution share into the pension program, the state covers administrative costs. It’s also possible the state would have to bail out the retirement fund in dire times.

Finally, Williams believes a state law requiring beneficiaries get automatic benefit increases when the cost of living jumps more than 1 percent needs to be fixed.

“Many people in the private sector have lost a great deal in their 401(k)s and their IRAs,” Williams said. “So, not only are they expected to make up their own loss, and not only are they not getting a cost-of-living increase, but they’re right now expected to make up 100 percent of the loss in the various state pension systems. It’s unreasonable.”

He added that automatic increases might be justified in a fully-funded pension system.

The Idaho retirement board gave pensioners a 1 percent hike this year, even though the cost of living grew about 3.7 percent.

Coming Thursday:  Williams shares his thoughts on setting next year’s budget. Video for the series by Mitch Coffman of IdahoReporter.com. 

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