February 3rd, 2010

State pensions: A problem off the radar

baystatebanner

State pensions: A problem off the radar

For some weeks, pundits will be busily dissecting the syntax of Barack Obama’s State of the Union address to uncover any hidden political meaning. While this process is underway, other stories of great political significance will be given short shrift.

Gov. Deval Patrick filed a bill last week to help rein in runaway costs for public sector pensions. Patrick has already signed legislation to prevent some blatant pension abuses. No longer can pensioners receive one year of pension eligibility for only one day of work, and voluntary service does not provide pension consideration.

Other practices that have been eliminated are the exclusion of the value of employment perks such as housing, travel or the use of an automobile from the salary level that serves as the basis for pensions. Also, pensioners are now prohibited from returning to work as consultants.

Patrick is aware that it is not enough to end those abuses. There is substantial evidence that some of the state’s pension practices are overly generous and fiscally irresponsible. The proposed legislation is the result of work done by the Special Pension Reform Commission that the governor formed last year to investigate the matter.

While journalists have become embroiled from time to time in debate over the survival of the Social Security system, the problem of financing public sector pensions has received scant attention. State, county and municipal employees are usually not covered by Social Security. While public sector employees may contribute from their salaries to a retirement fund, when there is a shortfall it is paid by taxpayers.

Public service labor unions tend to exacerbate the problem. The primary function of labor unions is to campaign for improved salaries and benefits. According to a recent report from the U.S. Bureau of Labor Statistics there are now more public sector employees in labor unions than private sector workers — 7.9 million to 7.4 million. The rate of union membership is also higher in the public sector — 37.4 percent to 7.2 percent.

Also, the U.S. Department of Commerce reported that in 2008, federal worker compensation, including the value of benefits, averaged $119,982 compared to an average of only $59,409 in the private sector. According to the report, the compensation gap has been growing annually since 2000.

Some public employees in this state have been enjoying excessive pension benefits. The governor is aware that it is fiscally unwise to ignore this growing problem.

Happy Birthday

It is hard to believe that the Boys’ Club, now the Boys and Girls Club, has been serving Boston youngsters for 100 years. And it all began in Roxbury in 1910. The original building still stands on Malcolm X Boulevard, opposite the Roxbury Post Office, but it has been converted into an office building.

The Roxbury Boys’ Club moved to its present location at 115 Warren Street in 1968 and it began admitting girls in 1981. An extensive renovation financed by the Yawkey Foundation improved and expanded the Warren Street facility, and it was renamed the Yawkey Club of Roxbury in 2006.

In Dorchester, there is also the Blue Hill Club at 15 Talbot Ave, and the Dearborn Club and the Mattahunt Club which are located in those public schools in Roxbury and Mattapan, all primarily in the African American community.

For 100 years, the Boys and Girls Club has established programs in a safe environment to enable youngsters to acquire sound values and develop their talents that will provide a productive life. The residents of Boston should, on its centennial, acknowledge the extraordinary contribution of this organization.

/imported