The thorough skunking Dane County conservatives took this month in the Spring elections is the direct result of Act 10, Scott Walker, and Donald Trump.
Trump only upped the ante. The bull was already enraged. Act 10 and its pension and health insurance reforms seven years ago is what salted the earth for conservatives in Dane County, perhaps for a generation.
Madison’s liberal-progressive-socialist hegemony might want to look to the state of Oregon and its principal city, Portland. The New York Times reports that Oregon’s public sector pension system is devouring funds that once went to public services like street repairs, teachers, and police. “Essential services are slashed” while local governments cannot raise taxes fast enough to keep up.
“Oregon now has fewer police officers than in 1970 [and] is losing foster-care workers at an alarming rate. … Even prosperous communities are being pinched.” One school district outside Portland laid off 75 teachers when its mandatory pension contribution spiked by $14 million. “That was after shedding 340 teachers in 2012,” the Times reports. (“Oregon faces a severe, self-inflicted crisis.”)
Oregon’s pension system guarantees at least 8 percent of every paycheck, no matter what the stock market does. When workers retire, their government employers were required to match the account balances, effectively doubling them.
Oregon’s state supreme court has turned back attempts to reform the system. Government employees were even exempt from paying state income taxes on their largesse. When the legislature required them to pay the state’s 9% income tax, like everyone else, they also increased pensions — by 9.89%!
Since 2003, new hires are enrolled in a more sensible pension program but they haven’t retired yet.
Oregon’s system differs from Wisconsin, where payouts can rise or fall depending on the performance of the system’s investments in the real-world stock market, smoothed out over several years to cushion annual returns. (Although annuities cannot fall below levels received in the initial year of a participant’s retirement.)
In 2007, for instance, Wisconsin Retirement System annuitants got a 6.6% increase but took decreases for the next five years, including 9.6% in 2012. Last year’s increase was 2.4% despite a 16.2% increase in the performance of its investments. Employee Trust Funds secretary Robert Conlin reports:
While the average funded status of public pension plans nationally hovers just north of 70%, the WRS funding ratio (a measure of whether a pension plan has sufficient assets to pay promised benefits) was 99.1% at the end of 2016.
What was the fuss in 2011 after the passage of Wisconsin’s Act 10? That public employees, once again, would have to contribute to their own pensions. Yes, before that, the government paid both the employer and the worker’s shares.
The NY Times, at one point, acknowledges that “Oregon is a blue state,” then moves on decorously. The truth is, Oregon is one of the most Democrat(ic) states in the Union. Its entry in the Almanac of American Politics relates:
Almost half of Oregon’s population lives in the counties in and around Portland, the city whose hippie-liberal sensitivities are lovingly satirized by Fred Armisen and Carrie Brownstein in the television comedy series Portlandia.
Oregon’s pension fund is $22 billion in the hole. Other states are in bad shape, as well, including New Jersey, $135 million in the bad, and Illinois “faces a pension crisis.”
Blaska’s Bottom Line: Oregon has not had a Republican governor for over 30 years. Oregon is Bernie Sanders country.