I tried to watch Tuesday’s
kabuki performance hearing of the House Government Operations Committee, but was repeatedly thwarted by a bad Internet connection. (Thanks, Consolidated Communications!) Still, I saw enough to realize what was going on. And enough to be completely fed up with all the expressions of dismay from Democratic officeholders.
The short version: The fix is in. The skids are greased. Following two days of dog-and-pony public hearings, the committee picked up on Tuesday exactly where it left off on Friday afternoon: Charging ahead with a reform plan that will substantially devalue pensions for teachers and state employees.
So, thanks to all those who testified. For your time and trouble, you get a lovely parting gift: our Pension Reform Home Game. Now you can play God with other people’s pensions, just like our legislative leaders!
One thing every committee member can agree on (well, except the three Republicans, they don’t seem to mind at all) is that these are difficult, painful conversations. In the brief statement she read at the beginning of the second public hearing Monday, committee chair Sarah Copeland Hanzas used the word “difficult” three times. “These are really difficult conversations,” “Everyone has had a tremendously difficult year,” “this conversation couldn’t have come at a more difficult time.” In her testimony on Tuesday, Treasurer Beth Pearce said “When we gave our recommendations, we did so with a great deal of reluctance… these are painful.” Other Dems chimed in with similar expressions of saditude throughout Tuesday’s hearing.
Pardon me if I can’t appreciate the self-pity parade. These conversations are waaaaay less “difficult” for elected officials than for the folks who’ll take it in the shorts if this plan (or something like it) takes effect.
Here’s another thing that’s cratering my sympathy for our poor hard-working betters: They’re lying about where we are in the process.
“This is the starting point of our conversation about how to stabilize our pension system,” Copeland Hanzas said at the beginning of Friday’s public hearing.
Well, sort of, if you squint real hard. But no, not really.
The reform plan excludes many potential solutions, and focuses on a single basic concept: The state’s contribution will consist of a one-time payment. and the employees will bear the brunt. The ongoing commitment to the pension funds will not increase. There will be no talk of a dedicated revenue source, or of raising revenues instead of imposing cuts. We will definitely not be raising taxes on the rich, you communists.
That’s it. The conversation, such as it is, will take place within a narrow band of options — all of which put most of the burden on the workers. It’s like going to a buffet and having a “choice” between mush and gruel.
And it will take place rapidly. As I’ve noted before, leadership is bound and determined to move a reform plan this year, and time’s a-wastin’.
By the way, Speaker Jill Krowinski claims the Legislature must act this year because lawmakers will be too busy with redistricting in 2022. Yeah, right. In truth, she wants this to be settled as far as possible from the next election. Because Democrats have to be hoping that teachers and state employees have short memories.
I’ll close with a couple of examples that show the insidiousness of the reform plan. The pain is spread around so that there’s no single thing that jumps out, such as a switch from defined benefit to defined contribution. But each provision will affect future pensioners, and the cumulative hit is substantial. (Warning: My math is sometimes a bit sketchy. I’ll try to provide reasonably accurate ballpark figures at least.)
Let’s take the cost of living adjustment for pensions. It’s currently 100% of inflation up to a ceiling of 5%. The “draft proposal” would apply COLA only to the first $24,000 of a pension. The rest wouldn’t get a bump.
Now, let’s take a hypothetical retiree — in a time machine so we can use historical data. If that person had retired in the year 2001 under the current system with a pension of $40,000 a year, and collected benefits through 2021, COLA would have boosted their annual benefit to a little over $60,000 a year.
Take the same person under the proposed plan. COLA would apply only to the first $24,000. That retiree’s 2021 benefit would be $52,400 — roughly $8,000 less.
That’s quite a bit of lost purchasing power. The longer a pensioner lives, the worse it gets. And the hit gets harder if the inflation rate goes up. For years now, we’ve had relatively low and stable inflation rates, but you never know when the Bad Old Days of the 1970s will make a comeback.
Second example, and this is even more impactful. Retirement ages for the vast majority of workers would increase to the Social Security full retirement age. For people born in 1960 or later, that’s 67 years old.
Under the current system, teachers can retire either after 30 years of service or after their age plus years of service adds up to 90 or more. According to teacherpensions.org, half of Vermont teachers begin their careers by age 25 and 72% do so by age 30. Let’s be conservative and say our hypothetical teacher started at 30.
Under the current system, the teacher could retire with full benefits at age 60 (under either calculation). Under the proposed system, that teacher would have to wait until age 67.
Now, I happen to be 67, and I can tell you my step has lost a lot of pep in the last few years. I can’t imagine myself keeping up with a classroom full of kids at this age. But the proposed plan would force teachers to stay on the job for the first several of what would have been their Golden Years.
Let’s take it one step further. The proposed reforms would not apply to current retirees or to those within five years of retirement. That’s great for them. But if you’re short of that five-year period, you’re shit out of luck. If our hypothetical teacher was 54 years old, they’d fall under the new plan — and their time until retirement would increase from six years to thirteen.
That’s a lot of broken plans and a lot more time on the job. And seven lost years of pension benefits.
This death by a thousand cuts will have a serious impact on future retirees, on how they plan for retirement, how much they can count on collecting, and how golden their Golden Years will be. For many, they’ll be copper instead of gold. Looks kinda the same, but worth a lot less.
So I cannot appreciate this spectacle of performative sadness on the part of elected officials. They will never feel any of the actual pain.