Finding bipartisan agreement on the state budget, by definition, will take compromise. With just three weeks left in the 30-day special session, getting there will require reasonable people to ignore ridiculous assertions, even when they come from supposed political allies.
Case in point: The demand by Senate Republicans, who were joined by three Democrats to form a philosophical majority in that chamber, that an early-retirement option for state workers and teachers covered by the state pension system be eliminated.
This isn’t some right-wing, anti-labor-agenda item. It was proposed last year by the Democratic governor, sponsored by the House Democrats’ lead budget writer, and approved overwhelmingly (25-2) by the House Ways and Means Committee. Clearly, it is seen by conservatives, moderates and even many liberals as a fair and sensible step toward greater sustainability for the state’s pension system.
Yet, as The Seattle Times reports, labor is casting it as a “war on workers.”
Please, somebody hose down the hyperbole machine.
The provision in question allows teachers and state workers covered by one of the state’s Plan 2 pension systems to retire three years early, at age 62, with full benefits if they have at least 30 years of service. Republican budget writers say repealing it would save the state $1.8 billion over 25 years. Official analysis by the state actuary is under way.
Early retirement with full benefits is a goody unions won in exchange for giving up “gain sharing,” a irresponsible perk whereby retiree benefits got richer when the pension plans’ stock-market returns heated up a few years ago. Investment gains in pension plans should be set aside to smooth out the inevitable dips during down markets, but politically powerful unions managed to win on gain sharing, at least for a while.
Republicans and some moderate Democrats demanding reforms as part of a budget deal are right to insist on the elimination of early retirement — which, by the way, would only apply to workers hired after July 1, 2012. It’s the responsible long-term policy choice, and will benefit future workers by better ensuring the pension funds they draw from in retirement are healthy.
It should be part of a final deal, regardless of whether it’s eventually tied to skipping a $143 million state pension payment to help balance the budget, as Republicans have proposed.
Look, as we’ve written before, public employees, by and large, do a terrific job and deserve the public’s thanks. But with defined benefit retirement plans vanishing in the private sector, and with people living longer in retirement, an early-retirement option with full benefits is a luxury that’s no longer affordable — fiscally or politically.
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