Rooted in Reason: Nurturing the Seeds of Liberty

Right on Trend by maliab
January 9, 2011, 4:07 pm
Filed under: Economy, Hawaii Sunshine | Tags: , , , , ,

By Malia Hill

So far, I’ve made a lot of Hawaii’s growing pension problem.  What I haven’t pointed out that as usual, Hawaii is on the cutting edge of the pension crisis. The only problem is that we’re on the cutting edge of the problem, not the solutions.  Consider this recent article by Rich Danker, which discusses the growing number of states and municipalities beginning to face the fact that something needs to be done to reform their pension system:

This populist push to get public workers to let go of some of their benefits for the common good is rupturing Democratic politics. State and local leaders such as Nutter are breaking ranks with unions to start bringing public-employee compensation down to earth.

Mayor Stephanie Rawlings-Blake recently pushed through comprehensive reform in Baltimore, and New York Attorney General Andrew Cuomo is making his fight against pension “padding” a central theme in his gubernatorial campaign. On Election Day, San Francisco voters will decide on a measure that would make city workers shoulder more of their retirement costs.

Democratic politicians are not only responding to dire financial forecasts, but are also wary of popular backlash against what is often seen as an exorbitant level of benefits. According to the New York Times, about 3,700 retired public employees in the Empire State are collecting pensions in excess of $100,000. In California, the tally is more than 15,000 pensioners.

The growing unease over lavish pension payouts and their risk of creating a public-finance catastrophe has already prompted previously unthinkable changes. California Gov. Arnold Schwarzenegger, who said pensions had become “the silent thief of our treasury,” held up the state budget for three months to wrestle significant concessions from Democratic lawmakers. Current workers will have to contribute more, the retirement age will be raised, and a benefit increase passed during the boom years in 1999 will be rolled back.

Danker goes on to discuss the fact that these reforms (especially in big states like California and New Jersey) don’t go far enough, and the article is worth reading in its entirety.  But there are two important lessons for us here in the Aloha state who are worried about what will become of our own treasury and pension system.  First, notice that most of the states forced to take action are heavily Democratic.  Hawaii may no longer be the near one-party state that it once was, but the dominance of Democratic politics means that there is a tendency to consider bold fiscal reform in the state to be a pipe dream.  But this is a lesson in the fact that cold, hard reality can wake up even the most left-leaning states.  Moreover, the voters of those left-leaning states are not automatically opposed to reform.  On the contrary, the move to change state pension systems is as much a populist movement as a political one.  In other words, Hawaii voters looking for more fiscal responsibility from our government can take heart because here is a place where we really can make a difference.  With the legislature session starting, this is our time to make the Leg realize that this is not a problem we can ignore.


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