After tackling the contentious issue of teacher’s pensions in the spring (more on that HERE), legislative leaders have announced that they are going to make a concerted effort to address the other government pension “elephant in the room” that being the state’s more than 2,800 government entities such as school districts, cities, townships and counties that have pension and other post-employment benefit obligations (OPEB) underfunded by an estimated $17.4 billion. NFIB members support action to address out of control government employee benefit costs.
Why is this a small business issue? Because whenever local governments start searching for revenue to keep promises to government employee unions (promises they never should have made in the first place) small business is always the ATM of choice.
Small business owners are tired of their taxes being used to pay for defined benefit pension plans for government employees while most private citizens are in defined contribution – 401K type plans. State employees were moved from their defined benefit plans to defined contribution plans in 1997. When NFIB members were asked: “Should government employee pensions be converted to defined contribution plans?” 92 percent of respondents said “YES”, 6 percent said “NO” and 2 percent were undecided. A copy of the survey question can be found HERE. When asked if small business should support legislation that would require the health insurance and retirement benefit levels of state and local government employees to be no greater than the average benefit levels in the private sector, 67 percent said yes.
NFIB will be joining forces with the Governor, House, and Senate leadership, and other business groups to get substantive reforms across the goal line by the end of the year. You can read more on this issue HERE.