By: Clark Williams
In the late middle ages, an outlaw dressed in a particular shade of green emerged in English folklore. The wealthy nobles of Nottingham would say that he and his band of merry men terrorized the Sherwood Forest by disrupting profitable trade routes. Yet, this legendary character’s name grew to heroic proportions because each seceding generation has found something redemptive about Robin Hood’s devotion to robbing from the rich and giving to the poor. Conversely, one of the biggest problems we face in Kentucky today, is Governor Bevin’s commitment to practicing “Robin Hood in reverse,” whereby he gives to the rich what he takes from the poor, teachers and other workers.
In January, despite being closer to full recovery of 2007 manufacturing jobs than any neighboring right to work state, Bevin led the charge to pass right to work legislation in Kentucky, effectively stripping unions of their ability to secure dues from all workers they are legally required to advocate for. Bevin has also signed a bill to repeal the prevailing wage and has been consistent in his efforts to make affordable healthcare less accessible to people who are struggling economically.
The Governor would argue that his positions are driven by fiscal responsibility and his desire to stimulate the economy. However, one consistent impact of his actions is that teachers, workers and poor people suffer, while wealthy and corporate interests reap harvests where, in many cases, they have not sown. Such is the case with Bevin’s plan for pensions.
Clearly, people do not choose to teach in public schools or work for state or local government to become rich. Rather, they do so because they believe that they can make a difference. However, the one distinguishing personal incentive for public servants has always been that they could pay into a pension system and achieve a well-earned measure of financial security upon retirement. Now, this security will be gone for new and future teachers and non-hazardous state and local government workers, if Bevin successfully executes his plan. And there are several major problems with this scenario.
By one report, there is a $33 billion shortfall across the state’s pension systems, even though the stock market is experiencing record highs. This is indicative of the magnitude of the failure of elected officials to make adequate contributions to the systems over a very long period of time. To Governor Bevin’s credit, he has taken steps to address the underfunding issue since he took office in 2015. But to expect state employees and retirees, who have lived up to their end of the commitment, to now shoulder the burden associated with fixing this mess is morally unacceptable.
Also, Governor Bevin, is proposing a solution that was not even designed to address retiree needs. It is well documented that 401(k)s were created to allow wealthy executives to defer taxes, while funding a supplement to their retirement income. In other words, they were never designed to replace pensions. However, once in place, corporations quickly began to save money by shifting other employees into 401(k)s and phasing out employee pensions. The quality of life of private sector retirees has suffered ever since. Only Alaska, Michigan and West Virginia have followed this corporate path, and all three transitions have been unsuccessful. Sadly, that has not softened Governor Bevin’s resolve.
Furthermore, shifting new and future employees into 401(k)s will not protect the pensions of retirees and employees that will remain in the pension systems. Without new employee participation, the amount of risk in each pension system’s investment portfolio will be forced to steadily decrease, and fund growth opportunities will perpetually shrink along with that risk. Therefore, the pension systems will either fail despite Bevin’s plan or more funds will have to be allocated from future state budgets than would have been needed to stabilize the systems as they currently exist. Either scenario would be inexcusable.
Additionally, the money exists to shore up all pension shortfalls and do right by all 500,000 workers and retirees in the systems, and all workers and retirees to come. But each year our current tax system gives those dollars away to corporations in the form of tax incentives and tax credits. Any sound businessperson knows that this issue needs to be revisited since the state gives more money away in the form of these tax breaks than it collects in total tax revenue.
Lastly, Bevin’s plan will require many people considering education and other public service to look elsewhere for a career path. It will also force many effective public servants to leave the professions they are committed to in order to gain adequate financial security. Anyone who values government services and protections, or quality education for our children, should find this outcome totally unacceptable.
But none of that seems to matter, when elected officials are intent on looking out for the interests of those who fund campaigns and inaugurations over the interests of the people they were elected to serve.
But if we still believe in government of the people, by the people and for the people, now is the time to stand up for us! So, we must call our legislators, visit their offices, send them emails, attend rallies and convey the message loud and clear that we, the people, will not allow Robin Hood in reverse to continue in the Commonwealth, and we will vote them out of office, if they choose this plan over people.