Judge Jackie Fulford did more than dig a potential $2 billion hole in the Florida budget. She gave back to a redefined union movement in this state the two things it lacked most -- muscle and heart.
Related: Should Judge Jackie Fulford Be Upheld? A Legal Analysis"
At the same time she delivered a jolt of oxygen to a deflated state Democratic Party.
Now look at them. The Dems and the unions -- symbiotic black holes in the eyes of fiscal conservatives -- are downright giddy. Judge Fulford has them on a roll.
First, in late 2011 she sides with the Florida Police Benevolent Association, declaring privatizing state prisons unconstitutional. Then she makes the same "unconstitutional" declaration over the state's claim that all its employees should pay 3 percent of their salary toward their pension.
I am not a legal scholar. I have no intention here of casting aspersions on Judge Fulford's work. But I will say this: I am hugely relieved -- make that overwhelmed with gratitude on behalf of my children and grandchildren -- that the state is appealing both cases.
Florida has to fight back; the nation has to fight back. Public-employee pensions are killing us.
It once was that unions were "trade unions." They represented a largely powerless, voiceless army of blue-collar workers. That just isn't true anymore. They truly are redefined. The majority of union members in America today are white-collared, college-educated and work for the government, where they receive an average of $123,049 annually in pay and benefits -- twice the average of workers in the private sector.
These unions "contribute mightily" to help get liberal politicians elected, and those politicians vote to increase pay for public workers. The result is that some states are approaching default because of decades of fiscal malpractice. Florida isn't there yet, but it's on its way.
The Florida Association of Counties, for instance, noted that in 2010 the state's collective unfunded pension liability rose to $17 billion (including $2 billion in the Deferred Retirement Option Program). Counties, cities and school districts, meanwhile, paid $2.6 billion in employee pension costs that year.
Try to get your head around the pension debt we're looking at with this countrys 87,000 state, county and municipal governments and school districts:
"By 2013, the amount of retirement money promised to employees of these public entities will exceed cash on hand by more than a trillion dollars."
Thats no fabrication. It comes from the Center for Retirement Research at Boston College, which recently released a disturbing analysis of 126 state and local pension plans. What did the centers researchers find? In the wake of the stock market collapse pension program solvency hit a 15-year low, with no signs of improvement on the horizon. This means taxpayers will be left picking up the tab.
Simon Elliot, a pension fund manager for the state of Rhode Island now retired and living in Fort Myers, said the reason pension plans are headed toward financial disaster is simple. "Ever-expanding public-sector unions have flexed their political muscle and larded up with lavish benefits to be paid out decades from now," he explained.
"In a properly run, private-sector business, future retirement benefits are paid for using present-day contributions. This is not the case when lawmakers have the power to boost public-employee benefit packages while using accounting gimmicks to conceal and pass on the debt to future generations.
"I'm grateful we now have leaders in Florida who recognize what is happening," Elliot told Sunshine State News on Friday. "Leaders who want to put the brakes on public-employee perks and cut the number of government employees.
"Whether Gov. [Rick] Scott and the state of Florida win or lose their appeal, it's a good chance to make Floridians aware of the fact that they are directly paying the salaries of more than 650,000 people, and if we can't ask employees to pay a little toward their own pension contributions, our payroll in unsustainable."
More than a year ago, a Florida TaxWatch study estimated that requiring new public employees to pitch in 5 percent of their salaries toward their own pensions -- a policy in many other states -- would save state government about $250 million a year and trim local expenses by $950 million. That's what the governor had wanted originally.
Other TaxWatch recommendations included eliminating health subsidies and trimming retirees' cost-of-living adjustment. TaxWatch calculated that limiting COLAs to inflation could save state and local governments $135 million in benefit payouts the first year.
Joe Kane, a retired senior analyst for the National Council on Aging, offered Sunshine State News these three principles for reforming what he calls "overreaching unions":
- Get public-employee compensation back in line with the private sector and reduce the overall size of the federal civilian work force.
- Make sure the government uses the same established accounting standards that private businesses are required to use, so unfunded liabilities can be accurately assessed.
- End defined-benefit retirement plans for government employees. Defined-benefit systems have created a financial albatross for taxpayers."
In the Fall 2011 issue of National Affairs, City College of New York political science professor Daniel DiSalvo writes scathingly about public employees' pensions and the horror story that perhaps faces Florida.
"... Because many states' pension commitments are constitutionally guaranteed," says DiSalvo, "there is no easy way out of this financial sinkhole. Recent court decisions indicate that pension obligations will have to be fulfilled even if governments declare bankruptcy -- because while federal law allows bankruptcy judges to change pension and health-care packages in the private sector, it forbids such changes in public employees' agreements."
Confront unions, policymakers must.
As Gov. Chris Christie recently said of his own bitter struggle with the public employees' union, "If New Jersey doesn't win this fight, there's no other fight left."
Reach Nancy Smith at nsmith@sunshinestatenews.com or at (850) 727-0859.
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