With so much at stake for so many, it’s simply wrong that Republicans Gov. Mary Fallin and Oklahoma Treasurer Ken Miller are working together at the last minute to streamline Oklahoma’s pension plans this legislative session without allowing adequate input from stakeholders.
The Oklahoma Legislature adjourns at the end of the month, and leaders are even hinting at an earlier conclusion, but news reports are only now surfacing that Fallin and Miller have nearly reached a deal or developed a proposal.
What that deal might be is a little bit difficult to ascertain, but it’s highly probable that any proposal would try to reduce the state’s costs in some manner and, given the current ideology in power at the Capitol, possibly shift more costs to pension holders and/or reduce their benefits. At the state Capitol these days, “reform” always means less for ordinary Oklahomans and more for the state’s wealthiest citizens.
In other words, what won’t happen is the honorable thing, and that is for the state government to simply meet its basic commitment to adequately fund the state’s seven pension plans, which now face an $11 billion liability.
Two major contentious issues have emerged. One is to streamline the management of all the plans under one board, an idea that is adamantly opposed by the Oklahoma State Firefighter’s Association. The second one is to somehow begin to change the overall system for new workers from a defined benefit plan to a defined contribution plan, which should worry anyone with a sense of logic. How can you change the system in this way for new workers in a state like Oklahoma without jeopardizing the future benefits of those currently enrolled in one of the systems?
The Oklahoma Education Association has issued a legislative alert about the matter because teachers fall under the woefully underfunded Oklahoma Teachers Retirement System (OTRS), and, on a personal note, I’ve had discussions with current teachers who are extremely concerned they will face reduced benefits when they retire. (Full disclosure: As a professor, I currently pay into the OTRS.) Our state teachers, some of the lowest paid instructors in the nation, working in some of the most underfunded schools in the nation, SHOULD be concerned.
There is no question that the overall liability of the pension plans is a problem, but the real culprit has been the lack of funding for the plans over the years. Our legislators have been more interested in cutting taxes for the state’s wealthiest citizens than honoring basic commitments to teachers, first responders and social workers.
Even as Miller, in particular, talks about the dire need for pension change, the legislature is considering tax cuts spread out over two years beginning in 2015.
Miller, in one news report, claims he and Fallin have been transparent and should have some specific legislation to offer next week.
But why wait until the last minute? It appears to be a political tactic to prevent groups interested in the issue to mobilize in protest. Politics has always been a dirty business in Oklahoma, but this political move, if it happens, is extreme by any standards, especially given Fallin’s undying support for a tax cut.