State pension ‘crisis’ was manufactured – never mind

Posted by AzBlueMeanie:

Well isn't this special. Senate Republican leaders said Wednesday that they are crafting legislation to repeal a law that took effect in July requiring employees in the Arizona State Retirement System to contribute more to their pensions. Public employees' paychecks may grow:

[T]his is hardly a pay hike. In fact, all the move does is bring employees back to where they were before lawmakers went looking for cash to balance the state's budget.

Before July, the state and its workers in the main retirement plan each contributed an equal amount of the assessment levied to keep the fund financially solvent.

The legislation altered that to have workers pay 53 percent of the cost, reducing the burden on the state to 47 percent.

That same change was mandated for others in the pension plan, including workers at public schools, counties, community colleges, universities and some cities. And to bolster the state's bottom line, schools – but not others – were required to send whatever they saved to the state treasury.

All totaled, state officials figured they could pick up more than $41 million this budget year.

Senate Majority Leader Andy Biggs said Wednesday that the maneuver was made because lawmakers were simply out of options. And he said they realized the implications.

"That affects people's salaries directly," he said. "That was probably one of the last things that went into the budget … to try to balance it. And it should be one of the first things to come out."

Biggs said that is now possible, with legislative budget staffers forecasting the state will end the fiscal year with more than $400 million in the bank.

It actually may not take legislative action to undo the law.

Last week a judge heard arguments by three unions representing teachers and state and local government workers that the change in the contribution rates is illegal.

Attorneys told Judge Eileen Willett that the Arizona Constitution says membership in a public retirement system is contractual and that "benefits shall not be diminished or impaired." They argued that altering the contribution formula to get the same benefit is tantamount to reducing the benefit.

I warned you that the pension "crisis" was manufactured. It was manufactured by the virulently anti-union Arizona Republic last fall when it ran a multi-part series on the "crisis" in public employee pension funds in Arizona. Public employee pension reforms – a manufactured 'crisis':

The Arizona Republic relied heavily on research from conservative think tanks and liberally quoted from Byron Schlomach of the Goldwater Institute in its reporting. As David Safier and I have demonstrated over the years, research from the Goldwater Institute is always suspect: they start with their desired conclusion and work backwards to create a plausible construct for their conclusion. It does not meet the standards of scientific research. The Goldwater Institute is no more credible than the "junk reports" produced by its sister organization, the Heritage Foundation.

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The Tea-Publican Arizona Legislature then cited The Arizona Republic series as a reason for taking up public employee pension fund reforms during the past session. Regular readers know that this was part of a national legislative effort through the American Legislative Exchange Council (ALEC) and its affiliated members like the Goldwater Institute. Two reports on the tentacles of the Kochtopus and ALEC. The only question is whether The Arizona Republic was a complicit participant in this effort. We report, you decide.

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The legislature's contribution formula is unconstitutional and is being litigated in court. Lawsuit filed to challenge unconstitutional public pension reform law.

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Arizona Court of Appeals judges filed a notice of claim over last session’s public pension reform bill and said they intend to challenge two provisions in the new law regarding the Elected Officials Retirement Program. Appellate judges threaten suit over pension reforms – Arizona Capitol Times.

It most certainly is unconstitutional, as I have previously posted. The legislation to repeal the law is simply the legislature acknowledging that what it did was illegal – "never mind."

How long is the public going to tolerate this "anti-union derangement syndrome" of the Arizona Republic? This newspaper has been cranking out anti-union and anti-labor propaganda for decades. Guys like Doug MacEachern and Robert Robb carry water for the Goldwater Institute and the Koch brothers' Americans for Prosperity on a regular basis. This always leads to bad public policy.

The Arizona Republic recently has been assaulting state and local government employees for "deferred compensation" for accumulated unused sick days Retiring Arizona public employees get to cash in years of unused sick days, despite the fact that this is common for public employees. It is compensation which was negotiated for in good faith and is contractual, just like the pensions. Apparently the Republic's "anti-union derangement syndrome" leads them to oppose contract law, but only if it inures to the benefit of working people.

This more than year long assault on public employees and their compensation by the Arizona Republic is both strategic and tactical — they are laying down artillery fire to soften up the battlefiled for the next major initiative by the Goldwater Institute, Americans for Prosperity and ALEC, among others — Gov. Jan Brewer's assault on the civil service merit selection system. Expect her assault on the civil service merit selection system to be a major component of her State of the State speech to the Arizona Legislature on January 9. And expect the Arizona Republic to provide her cover fire with opinion after opinion in favor of her assault on public employees.

Forewarned is forearmed. Be prepared to fight back.