BLOG : Ohio, Wisconsin
Bargaining for a Solution
The showdown between Republican lawmakers and public employee unions in Wisconsin is making national headlines and inciting protests from coast to coast, but Wisconsin is not the only state taking action to curb the power of public unions. Not by a long shot. In fact, many states are recognizing that public workers must be forced to share in the painful cuts to come. Salaries and benefits have risen unchecked for far too long, and the day of reckoning is upon us. Public sector pensions, healthcare benefits, and collective bargaining power are all serious issues and most states have trouble dealing with even one of them. Here's a look at some of the effort-within and beyond Wisconsin-that are underway.
To begin with, many states are considering revamping worker pensions. Currently, most states have a defined benefit plan where workers get a legally protected payout regardless of what happens to the economy or how their contributions change. By contrast, most private sector 401(k) style plans let benefits fluctuate with the economy to help keep funds actuarially sound. Some states have already created hybrid plans that contain a mixture of both styles, and others are getting ready to make the switch.
Retiree healthcare benefits can often be even more financially damning that pension liabilities, and states are tackling this issue too. Though related to public pension liabilities, most retiree healthcare funds are technically separate. Many of these plans were developed in an age when life spans were shorter and healthcare was cheaper. Most private sector workers don't have these lavish benefits, and their public sector counterparts may join them before long. For example, Oregon governor John Kitzhaber recently cut healthcare for state employees effective April 1, 2011.
Of course, the ability of public employee unions to hold states hostage with their impressive collective bargaining power is a key piece of the puzzle. It may be difficult for states to truly get employee costs under control until they confront unions head-on. Though Wisconsin has been making headlines lately, it is only 1 of 41 states where public workers earn more than their private sector counterparts. In light of this, the Manhattan Institute released a report offering tools for states to manage employee costs.
Ohio is also trying to reform their collective bargaining practices with public unions. Just yesterday, the state Senate passed SB 5, which aims to seriously curtail collective bargaining. Building from there, Governor Kasich will release a major government reform on March 15-including collective bargaining reform.
Latest budget shortfall projections
- Arizona: $763.6 million state budget shortfall through June 30, 2011 and another $1.2 billion for FY 2011.Governor's Budget. January 2011
- California: $25.4 billion through June 2012. Foxnews.com. 1/22/11
- Colorado:$1 billion. Timescall.com. 2/20/11
- Connecticut: $3.67 billion.The CT Mirror.1/25/11
- Delaware: $216.4 million.Delawareonline.com 1/28/11
- Florida: $.3.6 billion. FOX NEWS.com 2/1/11
- Georgia:$1.5 billion.Savannahnow.com. 2/6/11
- Hawaii: $71 million (FY 2010-11); $771 million (FY 2011-13).KITV.com. 12/20/10
- Idaho: $92 million (FY 2011-12)Bloomberg.com. 2/18/11
- Illinois: $13 billion (FY 2010-11) WSJ.1/12/11
- Iowa: $700 million (FY 2011-12). Bloomberg.com. 12/22/10
- Kansas: $550 million (FY 2011-12). Kansascity.com. 1/5/11
- Louisiana: $1.6 billion FOX 8. 12/30/10
- Maine: $840 million.The Portland Press Herald. 11/27/10
- Maryland: $1.3 billion (FY 2011-12) Afro.com. 1/27/11
- Massachusetts:up to $1.5 billion.Telegram.com. Masslive.com 1/17/11
- Michigan:$1.4 billion (FY 2011-12)Shootonline.com. 2/20/11
- Minnesota: $5.03 billion (FY 2012-13).Twin Cities Daily Planet.3/3/11
- Mississippi:$634 million. Thegovmonitor.com. 11/16/10
- Missouri: $1 billion.Kansas City Business Journal. 8/5/10
- Montana: $388 million (FY 2011-12). Bloomberg Businessweek. 10/8/10
- Nebraska: $1 billion (FY 2011-13) Action3news.com. 1/6/11
- Nevada: $2.2 billion.Examiner.com. 2/7/11
- New Hampshire:$800 million. Sentinelsource.com. 9/22/10
- New Jersey: $10.5 billion (FY 2011-12).Blogs.APP.Com. 7/22/10
- New Mexico:$452 million.Bloomberg Busineeweek.com.11/11/10
- New York:$9 billion NY Times. 1/1/11
- North Carolina: $2.4 billion (FY 2011-12) and $2 billion (FY 2012-13)The TimesNews.com.2/20/11
- Ohio:$8 billion (FY 2011-13) Foxnews.com.
- Oklahoma: $600 million (FY 2011-12) kfor.com. 2/7/11
- Oregon: $3.5 billion (FY 2011-13). NRToday.11/23/10
- Pennsylvania: $4 - 5 billion (FY 2011-12). The Philadelphia Inquirer. 12/17/10
- Rhode Island:$365 million (FY 2011-12)). WPRI.com. 11/10/10
- South Carolina: $829 million (FY 2011-12). GoUPstate.com. 1/7/11
- South Dakota: $32 million (FY 2011-12) $107 million (FY 2012-13).Yankton press. 1/30/10
- Tennessee: $1 billion. WSMV.com. 1/31/11
- Texas: $15 billion. Chron.com. 1/18/11
- Utah: $700 million. KCPW. 12/11/10
- Vermont: $112 million (FY 2012-13).5WPTZ.com. 8/22/10
- Virginia: $200 million (FY 2011-12). WashingtonExaminer.com. 12/17/10
- Washington: $600 million (FY 2000-11) $4.6 billion (FY 2011-13)www.governor.wa.gov. 12/17/10
- West Virginia: $150 -$160 million (FY 2011-12). Charleston Gazette. 6/7/10
- Wisconsin: $137 million (FY 2010-11) and 3.6 billion. (FY 2011-12).JSOnline.com. 2/7/11
"To begin with, many states are considering revamping worker pensions. Currently, most states have a defined benefit plan where workers get a legally protected payout regardless of what happens to the economy or how their contributions change. By contrast, most private sector 401(k) style plans let benefits fluctuate with the economy to help keep funds actuarially sound."
You do know that teachers do not contribute to, nor may they collect Social Security? A pension isn't gravy, or an additional plan. it replaces social security. Here in IL teachers pay 9.5% nof their income towards pension, and the district pays .54%. In contrast, the average person pays 4% of their income to social security and their employer pays 6.4% (nationwide). If IL switched to Social Security for teachers only tomorrow, it would cost IL taxpayers an additional $950,000,000 a year. Yes, almost a billion dollars. Teacher pensions save taxpayers a billion dollars in our state every year. The reason its underfunded is that Illinois collected all the money from teachers and districts, they just didn't put it in the retirement account. THey don't seem to know where it is.
This is not because of union bullies, or greedy teachers who fund almost all of their own retirement, but politicians moving money around in a shell game. It would be fully funded if the teachers money wasn't funneled through the black hole of Illinois politics. We did our job. They didn't do theirs.
posted by : B
Tuesday, March 8, 2011 at 01:48 AM | Permalink