AN OPEN LETTER TO POLITICAL MODERATES

Rochester, N.Y.--  No doubt about it, public employees have targets on their backs.

However, one can make the powerful argument that the problems facing state governments are because of the failure of Wall Street and a horrible economy-- not retirement funds for public employees. Published research a few weeks ago by the Economic Policy Institute (EPI) and recent reports from several reputable news agencies also support this notion.

Many politicians and anti-labor forces like Carl Paladino focus on the myth that retirement security for public service employees is one of the causes of overburdened state budgets. This is false. This is just campaign rhetoric and has been disproven by the facts.

Noted Washington Post contributor Ezra Klein recently reported that pension obligations currently account for only 3.8 percent of the average state’s spending. This is not where the current crisis is coming from-- so why are some candidates blaming public sector pensions for our fiscal woes?

It is reported that AFSCME retirees receive an average of $18,000 per year after retirement and most of the rank and file contribute toward their pensions throughout their working careers. According to the Center for State and Local Government Excellence, state and local public employees’ total compensation, including salaries and benefits, is approximately 7 percent less than that of private sector workers.

In the months before the financial crisis, states had built up record rainy-day funds and were starting infrastructure projects. Then Wall Street collapsed, and so too did the revenue states got from taxing property, incomes and sales. At the same time, the demand for social services went through the roof. The result produced a terrible strain on state budgets.

If we want to solve the revenue versus spending dilemma, let's take a long hard look at what got us here in the first place-- deregulation, unscrupulous bankers and a bursting housing bubble.

As a result, we should not be blaming public employee retirement funds for the budget crisis we are now experiencing. Granted, down the road state and local governments and the unions who represent those workers will have to work together to solve our future budget deficits. Let's not forget, back in 2009 it was the unions groundbreaking health care proposal and agreement with the City of Rochester that could result in $30 million in savings over a three year period.

(photo by Ove Overmyer)