Monday, October 22, 2018

OCPA column: Oklahoma’s pension giveaway to career politicians

Paying career politicians
by Jonathan Small, president of the Oklahoma Council of Public Affairs (OCPA)

Representative government doesn’t work when we let politicians spend future generations’ money. It’s taxation without representation. It’s also something we do every day in the United States and in Oklahoma.

Politicians love taxation without representation. Maybe you’ve heard the old line: “Don’t tax you, don’t tax me, tax the man behind the tree.” It’s always easier to tax someone if you don’t also have to ask for their vote.

Government debt and pensions are the new forms of taxation without representation. Future generations will pay the bills, but politicians are spending the money, or making the commitments, today. If taxation without representation is akin to theft, then this is stealing. It also corrupts the recipients of this largess, including the American people at large. We are all stealing from future generations in order to finance growing entitlements and pension promises that make us feel good today.

Oklahoma’s pension giveaway to career politicians is perhaps the worst example. Until it was curtailed by reform legislation, state law allowed elected officials to “buy” a higher return on their pension. This gave career politicians a bigger paycheck in retirement than they earned while in office. For example, when Gov. Mary Fallin leaves office next year, her $176,000-per-year pension will be $29,000 more than her annual salary.

Drew Edmondson’s current state pension is $149,934. According to state records, Edmondson’s already received $1.2 million. If he becomes governor, he’ll get an annual salary of $147,000 while continuing to collect his state pension, for a combined income of nearly $300,000 a year. All this data is technically public, but much of it—including information about one local superintendent who retired at age 61 and is paid $174,325 annually—was not available online until the Oklahoma Council of Public Affairs posted it on our transparency website.

While better than some states, Oklahoma still has unfunded pension liabilities around $8 billion. If responsibility isn’t embraced and maintained, this liability will increase. The same thing will happen if politicians decide to buy political power by making pensions more generous or by redirecting pension payments to more alluring projects.

The solution to the inherent risk of government pensions is to replace them with a retirement system controlled by qualifying non-hazard duty employees, not the politicians. This transformation has happened already in the private sector and some areas of Oklahoma state government, where workers own their own 401(k) or other retirement account.

All non-hazard duty government employees deserve that level of control over their own future, and taxpayers should never be on the hook for the promises of long-ago career politicians.

Jonathan Small serves as president of the Oklahoma Council of Public Affairs.


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