Do As I Say, Not As I Do
Mr. Jerry Kalish provides a novel suggestion in response to a July 13, 2006 post about legislative attempts to curb dividend payouts for underfunded pension plans. (See "Dividends, Pensions and California Chaos".)
Creator of Retirement Plan Blog, Jerry writes the following:
"The proposed bill - and the politics behind it - conveniently ignores the massive unfunded pension liabilities in California, e.g, the California State Teachers' Retirement System faces a $24 billion unfunded pension liability.
But we got them beat in my home state of Illinois which at $35 billion has the largest unfunded pension obligation in the country. The Fitch Rating service released a "negative outlook" for Illinois finances - one of only three negative outlooks issued by the rating service in its review of the states. The other two? Louisiana dealing with the aftermath of Hurricanes Katrina and Rita and Michigan dealing with massive problems in the automobile industry.
Um! Should there should be a law that says no more salary increases for state legislators until pension liabilities are met?"
Give the man a bow for an astute observation.
Others have provided novel solutions to the ubiquitous problem of do as I say, not as I do. In 1993, then Michigan state representative Greg Kaza proposed that legislators' pensions be taxed at the state income tax rate, similar to what they required of others. The result? A few months later, the state ceased taxing private pensions. Greg continues to dazzle as executive director of the Arkansas Policy Foundation.
