Missouri Treasurer Eric Schmidt stood at the St. Louis riverfront next to a poster with an outline of the neighboring state saying “Don’t be like [Illinois].”
To be fair, he also needed a poster with the arrow pointing west saying, “Don’t be like [Kansas].”
And, he needed a mirror.
A quick reminder: Illinois made budget issues a tradition decades ago. The “crisis” came after the election of the “self-made businessman” who “is committed to turning Illinois around.” [ https://www.brucerauner.com/about-bruce/ ] Bruce Rauner went out of his way to antagonize legislators, state workers and the labor movement. For example, at a unionized meat plant he proclaimed the virtues of “right to work” [ http://www.mystateline.com/news/gov-rauner-tells-rochelle-union-workers-about-his-right-to-work-plan ] and sent word to a state worker’s to ‘not cross the governor’ by calling a legally allowed strike [ http://www.chicagotribune.com/news/local/politics/ct-jim-durkin-afscme-met-0205-20170203-story.html ].
The novice governor also allowed the state’s budget to implode by not keeping an income tax rate meant to stabilize revenue [ http://www.chicagotribune.com/news/local/breaking/ct-illinois-income-tax-rate-falls-met-20141230-story.html ]. In other words, he turned the ship into the iceberg.
Rauner did accomplish one thing: he convinced many that in Illinois “the salaries and pensions are grand,” as a friend e-mailed me. Yes, as in Missouri and many other states, retired school superintendents and senior bureaucrats do very well. Most employees do not. I know a retired Illinois food stamp worker. After decades with the state her pension is about $28,000 a year.
According to the Better Government Association, yes, about 4% of retirees get $100,000 a year or better. However, “Payments to the overwhelming majority of pensioners, most of whom don’t qualify for Social Security, are far more modest…the median for general state workers is $28,946.” If pensions were capped at $100,000, well “the savings at those major funds would amount to…only 2.6% of the total.” [ http://www.chicagobusiness.com/article/20170523/NEWS02/170529966/heres-what-you-probably-dont-know-about-illinois-pensions ] As with other ‘outsider’ governors, Rauner doesn’t let facts get in the way of a good myth.
Meanwhile, Kansas. Governor Sam “Scowling Mad” Brownback’s massive tax and program cuts were recently repudiated by most of his fellow Republicans. [ http://www.npr.org/2017/06/07/531886684/the-kansas-tax-cut-experiment-comes-to-an-end-as-lawmakers-vote-to-raise-taxes ] Years of following ‘celebrity economist’ Arthur Laffer’s advice left the Kansas state government in ruin. The economist’s response to the deficits and pain: “You have to view this over 10 years. It will work in Kansas.” [ http://www.kansascity.com/opinion/opn-columns-blogs/steve-rose/article7024256.html ] That means a kindergartner would hit high school before the positive impact of possible growth became apparent.
Time for the mirror.
Treasurer Schmidt noted “Missouri’s $15.07 billion total unfunded pension liability…” [ http://themissouritimes.com/42469/schmitt-urges-missouri-legislature-dont-be-like-illinois/ ].
His answer: “Provide tax relief,” especially for small businesses, and, “Shrink the size of government.” He praises Governor Eric Greitens efforts to “eliminate wasteful spending” on unnecessary things such as prescription drugs for seniors and safe school busses.
The treasurer overlooks a generation of Missouri tax cuts, going back to 1980’s Hancock Amendment! The state auditor notes that Missouri is $4.1 billion a year in general revenue below the Hancock cap. [ http://www.abc17news.com/news/auditor-galloway-reviews-states-compliance-with-hancock-amendment/501213197 ] It seems strange to advocate for “relief” after tax yield dropped 40% in 37 years.
That unfunded pension liability? Remember, that’s basically a 50 year number. Part of the shortfall is in dedicated plans for educators, transportation workers and others. Those plans are self-supporting. Missouri could reduce risk for general state workers by contributing another $200 million a year (about 2.2% of current General Revenue) to the main pension fund. Yes, that’s real money but not impossible.
What’s really sad is that a few years back, as a State Senator, Schmidt advocated for more state spending for those with autism and other special needs, and, he championed coverage for autism services in health insurance plans. He genuinely worried about other people. He seems to have abandoned those values in favor of a photo op on the riverfront.
I wonder what he sees in the mirror each morning?
Submitted by Glenn Koenen, WCD Member