PubSecAlliance in the ring swinging on your behalf

Newspaper and television commentators like Jeff Jacoby want the public to believe that it’s your pay and benefits that’s at the root of our economic problems. Jacoby even makes the outlandish assumption that it’s your pension that’s causing poverty.

This website/blog was established to fight back against the forces aligned against you. The effort is starting to pay off.

Last week hundreds of virulent op-ed pieces ran all over the county with headlines like this one from The Boston Globe: “Public pensions are eating taxpayers alive.”

This particular article (they all have similar talking points probably provided by the American Enterprise Institute) penned by regular Globe columnist Jeff Jacoby, reaches new lows in the effort to destroy public sector pensions by creating jealousy and even hatred towards our teachers, police officers, firefighters and nurses. When your local newspaper prints something like this, send in a response. You cannot let these lies and distortions go unchallenged.

Here are just a few of Jacoby’s comments about your pensions:

Some of my best friends, to coin a phrase, are lifetime government employees. When they stop working, their pensions will put them among the highest-earning retirees in the country.

Some cities — from Vallejo, Calif., to Detroit to Central Falls, R.I. — have been driven into bankruptcy by the unaffordable retirement benefits they have promised public-sector workers.

In San Jose, taxes have been raised, public services cut, and the number of city employees drastically reduced. Yet annual retirement payouts for public-sector workers continue to climb, thanks to lavish pensions that enrich municipal retirees with as much as 90 percent of their former salaries — and court decisions barring pension benefits for public-sector employees from being rolled back.

The result . . . is the “startling injustice” of poor and working-class taxpayers forced to make do with less and less so that the gold-plated pensions of public-sector retirees, which already gobble an outsize share of government budgets, can keep devouring more and more.

If you want to read more, be our guest.

My husband, Jim Brown, a retired professor at the Kennedy School at Harvard wrote this rebuttal to Jacoby and sent it to the Boston Globe.

Public pensions are not the problem

by Jim Brown

The myth lives on. Columnists like Jeff Jacoby (Public pensions are eating taxpayers alive: March 23, 2014), accept the idea without question and use dubious data to back up their claims. The public, after being bombarded by propaganda supported by those trying to undermine collective bargaining, think it is true as well. But all the evidence points in another direction.

And what is this myth? It’s the story told over and over for close to a decade – the financial crisis and associated threat of bankruptcy of local governments is caused by the high wages and huge pensions going to our firefighters, health care workers, law enforcement officers, teachers, and others working for our town, city, county and state governments.

Jacoby uses two lines of argument. First he tells unsubstantiated stories about his “friends” who when they retire will have pensions that “will put them among the highest-earning retirees in the country.” This is a bogus proposition from the get go. It is repeated without evidence to build animosity towards people in the public sector who still have pensions while most in the private sector have lost theirs. Sure there are a few people who receive large pensions, but they are the exception. If you check the actual annual pension benefit going to our retired teachers, town hall office workers, public works employees, law enforcement officers, firefighters and registry of motor vehicle workers, it’s a modest stipend. Jacoby’s friends are clearly the exceptions, which probably explains his odd notion of reality.

Jacoby’s second argument is that cities and towns are being overwhelmed by the amount of revenue that is needed to fund pensions. The evidence tells a different story.

Shelby Chodos, a lecturer at Harvard University Kennedy School of Government with a special expertise in public finance, has gathered extensive data on local government finances including how much money is going out to pay for pensions.

His research shows that pension expenditures are not the “fundamental cause” of the budget problems for local governments. Recent local government spending on pensions for retirees amount to just 2.9 per cent of total government expenditures.
In 1980 pensions were 4 percent of the budget. That percentage rose to a high of 4.2 per cent in 1985 before declining to a low of 2.0 per cent in 2001.

How could the costs of something that is such a small per cent of total expenditures and has been declining over the last 30 years be the cause of the fiscal crisis? The answer is clear. Pensions are not and have never been the cause of the fiscal problems of local government.

So if pensions aren’t the problem, what is the cause of the budget shortfalls impacting almost every state, county, city and town in the country? Failed policies in Washington and speculative excess on Wall Street resulted in the Great Recession. In all recessions local government finances are negatively impacted because of declines in revenues and increases in expenditures. The Great Recession was more severe so these impacts were more severe.

For example, state tax revenue fell by more than 10 per cent on average in 2009. By contrast, revenues fell by only about 6 per cent during the recession in 2001. On the expenditure side, during this most recent recession millions of people lost their jobs and required even more “safety net” expenditures like food stamps, and unemployment insurance. And this was all compounded by the rapid and dramatic increase in health care costs.

Nationally, per capita health care costs increased 3 per cent in 2009 and 2010. Between 2005 and 2010, health insurance premiums were up more than 25 per cent. Health care spending has increased twice as fast as revenues in the six years between 2005 and 2011. Even as the economy improves and budget problems ease, local governments are facing serious financial stress in order to pay for health care and other important concerns such as infrastructure repairs.

Local budgets were very hard hit by the recession caused by Wall Street. It is interesting to note that the majority of the bailout funds went to banking and other financial organizations as opposed to state and local governments. Then adding insult to injury, the wages and pensions of public sector employees are blamed as the cause of the local government financial crisis.

The myth that the pensions of our retired teachers, police officers and firefighters is the root of our economic distress goes on and it has real consequences. We all have to do our part to help the public understand the truth.

Jim Brown is a former professor at Harvard’s Kennedy School of Government and the former director of the Harvard University Joint Center for Housing Studies.