I can’t pay my rent because I’m saving for retirement

In 2005, I was a registered Democrat and wrote on the progressive blog Blue Oregon that by not reforming PERS and providing full health care benefits for public employees, Democrats were endangering public services to the needy and education funding. I wrote:

“The perhaps cruel fact is that the Oregon taxpayer is not willing to pay additional monies for anything so long as it sees public employees retiring at 55 with [a pension equal to 105% of their final salary], and medical benefits far in excess of the norm.”

Oregon has struggled with balancing a budget while adequately funding education for the past 15 years. A major part of the problem has been PERS and health care costs for public employees that continue to rise faster then revenues. We’ve gotten by partly through service cuts, more crowded classrooms, and a good economy. But those who are served by government have suffered. Kids in foster care, university students, and the poor who are most effected by poor environmental conditions.

Today the Oregon state economists report that revenues are way up. And wthin the next few days or weeks Governor Brown will sign a $2.8 billion dollar tax business tax increase. While these new revenues will plug a short term budget hole and maybe even provide some needed “new” revenue for better service levels, make no mistake, much of the new revenue will eventually have to go to public employee benefits, including retirement and health care costs, within a few budget cycles.

From www.perssolutions.org

I want to have excellent government services provided by well compensated public employees. I’m not opposed to passing some tax increases to make that happen if necessary. But the fact is, an overly generous benefits package presents a very real problems in achieving progressive goals.

The first problem it has caused is reduction in employment. As stated above, the more each employee costs as employee costs outstrip revenue increases, the fewer employees government can hire. This is a leading cause of crowded classrooms and large caseloads for foster care and social workers.

Second, it creates a political problem in achieving liberal goals. Very generous retirement and health care benefits make some moderate voters feel like there is enough funding it’s just not being properly spent. They may feel like a person that has a sibling who is always asking for a loan to pay their rent to avoid having their family evicted yet seeing that sibling sock away 25% of their paycheck into their retirement so they can retire early. It makes one not want to help out with the rent so much.

So the truth is, an unreformed PERS system does produce a cost to progressive government and social justice. And the non public employee factions within the Democratic Party should realize that public employee union leadership’s demands that they “bend the knee” to union financial demands without question or dissent has caused harm to their causes. Maybe it’s a trade they accept, but that trade has consequences.

Progressives could count on winning super majorities in both houses, the Governors seat and offering tax exemptions for Oregon’s largest corporations in order to continue to increase taxes. But we do have a unique opportunity right now and it’s because of the Democrats newly passed business tax increase.

Humans respond to reciprocity, and fair and legal reform to public employee benefits would now be one of most strategically powerful acts liberals could take. Such action would tell individual and business taxpayers that progressives believe that public services for the needy and education should be as important as fair union benefits. That all stakeholders are prepared to use this new revenue wisely. And that should new or increased taxes be requested in the future, such as for paid family leave, then taxpayers could trust that the revenue would likewise be used wisely and for the general welfare

It would be like if my sibling came and asked for a loan to pay rent to avoid eviction and also told me that he was going to reduce his retirement contribution from 25% to 20% of his paycheck in order to make sure he could still retire comfortably, but also help on his own to make ends meet.

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