Jefferson Review

"Your Liberty is Our Interest"

Home /  Archives / Links / Quotes / Book Reviews / Advertise /Contact us / Subscribe / Calendar

Planes, trains and Porky at the reins

By Jim Waters

(WHERE THE TRACKS END, Ky.) — The headlight on Kentucky’s out-of-control Pension Express has rounded the bend and now about everyone can see it.

Everyone, that is, except the House leadership in Frankfort.

Apparently this is one train that’s going to run out of track before House Speaker Jody Richards and Co. smacks its collective forehead in feigned disgust while exclaiming, “We’ve got to do something about this!”

But Richards & Co. shows little interest in making tough decisions in order to save the Pension Express from derailment.

Senate President David Williams put forward a plan to get some track laid before the wreck. While Williams’ plan lacks some built-in accountability factors to guard against future crises – such as requiring voter approval for benefit increases – his proposal does address critical short- and long-term issues.

In the short term, Williams proposes borrowing $538 million through bonding that would provide pension accounts with an immediate cash infusion, absolutely necessary for the state to fulfill current obligations to state workers and retirees. And undoubtedly, the commonwealth must keep those promises.

Richards and his fellow profligate spenders in the House jumped on board with support for the proposal, which often is the case if the matter involves either large amounts of borrowing or spending of taxpayer money. And House members move real quickly to support proposals that benefit state workers, a deep pool of voters – one most of them have dipped into plenty during their tenures.

However, true to form, Richards & Co. balked at the part of Williams’ plan that would offer real reform to the pension system by calling for a reduction in benefits for workers hired after July 1, 2008.

That’s not surprising. We’ve heard little from Richards or his fellow “Spendacrats” about the need to consider the long-term effects on all Kentucky taxpayers rather than just the short-term benefit drawn from a powerful voting bloc.

The speaker hemmed, hawed and tap-danced before offering the Associated Press a typical bureaucratic response to an issue of huge importance. He claimed that the long-term effects of the plan remain “uncertain,” and not enough time exists during this session to resolve the issues.

However, there always seems plenty of time in a session to spend – like borrowing millions of dollars to replenish accounts raided in the past by politicians who spent like Imelda Marcos at Philippine shoe stores. Yet there never seems to be enough time to consider tax cuts, spending control or the economic burden facing future generations.

Richards seemed to dismiss the urgency of pension reform. “You need to know where you’re going to land before you jump,” he said.

OK, if the speaker prefers plane travel to train rides, fine. Then he should be concerned about the parachute not opening when he gets around to making the leap. The state’s pension system will land all right, and with a “SPLAT” – $200 million in the hole this year and broke in 15 years.

But I like the train analogy.

If the out-of-control Pension Express is allowed to roll on while opponents of meaningful reform waste precious time seeking ways to satisfy state workers, labor groups and politicians concerned about their reelection chances, the public inherits the ensuing train wreck.

Richards and his fellow politicos lack of concern dates back to a spending spree in the 1990s. That “spendapalooza” included sweetening the pot for state workers by allowing them to count an unlimited number of unused “sick days” toward pensions and by changing the pension-calculation formula to ensure higher payments.

The result? A pension system estimated to cost Kentucky taxpayers $890 million next year. On top of that, the state has been underfunding state pension accounts in recent years.

Exercising their infinite fiscal wisdom, Frankfort’s politicians cut funding to the state retirement system in 2003 to make more money available for projects that Porky the Pig would enthusiastically come out of retirement to endorse – for a fee, of course. (And yes, Porky would continue collecting his fat taxpayer-funded pension check.)

While the Senate president’s plan came late in the 2007 session, his proposal suggests he’s seen the light of the oncoming train. And he seems to understand that without getting more tracks laid – and removing Porky as Pension Express engineer – the situation could get messy, indeed.

– Jim Waters is director of policy and communications for the Bluegrass Institute, Kentucky’s free-market think tank. You can reach him at jwaters@bipps.org. You can read previously published columns at www.bipps.org.

Weather (Louisville) / Mapquest /  White Pages / Business Search / CNN / Dictionary / E-card / MSN