Lars Larson: Union pensions—the mother of all taxpayer bailouts

If you thought the stimulus was bad, wait till you see the Union pension bailout.

I got the chance to talk to my friend, Mark Hemingway, from the Washington Examiner. He’s done a little research into what he calls the “mother of all taxpayer bailouts”. It’s about Unions.

Unions aren’t funding their pensions. After all, why should they? Union fat-cat bosses can’t live high on the hog if they have to put all that money aside for their members. Instead of funding pensions they are paying themselves big salaries. In fact, in many cases, you find the Union bosses have a different pension than the Union rank-and-file.

How do you like that? Can you imagine being a Union member and not even knowing that some of the Union pensions are funded at only 65% of the amount of money they’ll need to supply the pensions?

The government can’t bail them out. Heck, just doing Delphi’s bailout cost $6 billion. Mark’s right. If they talk the Obama administration into this, it will be the “mother of all taxpayer bailouts”.

“For more Lars click here”

Post to Twitter Post to Facebook Post to LinkedIn Post to Reddit

Posted by at 06:00 | Posted in Measure 37 | 23 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Rupert in Springfield

    >Mark’s right. If they talk the Obama administration into this, it will be the “mother of all taxpayer bailouts”.

    If you think for five seconds that we wont be bailing out these unions (read states) in the next few years you are crazy.

    Not just Oregon, but plenty of states made deals with fat cat unions members that would make Enron chiefs blush. Now states are on the hook for those Union pensions in one way or another and those obligations cannot be met. A solution will have to be found – either states going into receivership (bankruptcy) administered by the Federal government or a massive union bailout on the Federal level for the individual states mistakes.

    I can already tell you the ad campaign:

    (Black Background, slideshow of CEO’s Gulfstream jets and political back slapping)

    We bailed out AIG, Citibank and all the other Wall Street firms – They handed out bonuses with your money.

    (FTB)

    (Slide show of working people, Nurses, Teachers and other professions with sap appeal)

    Isn’t it time we bailed out those who really work for a living?

    Support the Union Trust Fund – After all, these people actually earned their money.

    (FTB)

    People will probably fall for it too. They will hope people will forget how their taxes were raised to pay inflated salaries to state workers in the first place. They will hope people will forget that the average school administrator has less accountability than the students in the class room. Those kids are actually graded on their work and have some accountability – either failing the class or being left back.

    Want to know something else?

    All those corporate bailout funds at least in theory were supposed to be paid back. In fact some of the TARP funds are being paid back.

    So the question you have to ask yourself is – Is the guy who just got us that lousy deal on strategic arms with the Russians going to get the American people a good deal with any union bail out? Not on your life. BO just got the floor moped with him in Moscow but that was nothing compared to the limp noodle act we will see him do with unions on this issue.

    As much as some might have hated the corporate bailouts, and I was one of them, it will be nothing compared to the utter corruption we will see when it comes to bailing out the unions. The American people will likely not get a dime of their money back.

  • Bob Clark

    I think top government officials should declare an immediate emergency, and raise the retirement age for government workers from 55 years old, which is pretty typical, to the social security thresholds of 62 for reduced benefit package and 66 or 67 for full benefits package. There would be exceptions for military and some fire and police units who have a lot of physical demands. Raising the retirement age to something more akin to social security levels should close a large portion of the gaps in government pension funding. It would do this by reducing the time pension benefits are paid out to each retiree, and also, retaining existing employees so as to reduce employment of new hirees who become vested in some cases as little as six months into the job.

    • eagle eye

      You must think government officials have the power to void contracts on the basis that they have “declared an immediate emergency”.

      • Rupert in Springfield

        Well, it wouldn’t be surprising. A lot of things are possible under emergency situations. The emergency issue is the reason why a lot of state employee unions are forbidden to strike for example.

        • valley p

          “They will hope people will forget how their taxes were raised to pay inflated salaries to state workers in the first place. ”

          Um…which “tax raise” was that? 66 and 67? Since 95% of people won’t pay it, are you writing to the other 5%?

          “I think top government officials should declare an immediate emergency,”

          What is the emergency exactly? That you don’t want to help pay for your government’s obligations? For that tanks should roll in the streets? (Just a metaphor…not meant to be taken literally).

          “The emergency issue is the reason why a lot of state employee unions are forbidden to strike for example. ”

          Given that government workers are useless and most government unnecessary, don’t you find that ironic?

          • Rupert in Springfield

            >Since 95% of people won’t pay it, are you writing to the other 5%?

            Again – Please think before making comments. No where did I say I was talking specifically about 66/67.

            State workers currently make more than the average worker, This is especially so when compared on a n equivalent job basis. Not much debate on that one and I think most of the public is aware of the pay disparity. Have taxes gone up to pay for this? Yep.

            Think people are going to continue to pay for it?

            Nope

            Don’t believe me?

            Look at the smack down Ted got for suggesting keeping the kicker after measure 66/67 passed.

            >Given that government workers are useless

            Given that I have never said any such thing then we can take as a given that this is another meaningless statement of yours.

            >and most government unnecessary, don’t you find that ironic?

            No, what is ironic is that I have continually corrected you on this sort of thing and you keep making the same mistake.

            Ok, its not ironic, its just simply stupid.

            The record of conservatives supporting such agencies as tend to have strike prevention is pretty clear.

            The fact that I have to keep pointing this out to you, and you can never learn because you prefer to keep playing floor mop is possibly ironic. However I think sad or pitiful might be the more correct term.

          • Steve Plunk

            Wasn’t the last legislative session called under the emergency provision? I guess we’re living in a perpetual state of emergency.

          • valley p

            “Have taxes gone up to pay for this? Yep.”

            What tax that has gone up to pay for state services over the past 20 years, other than 66 and 67? Property taxes were cut twice. The income tax was untouched until M67. We have no sales tax. So what additional taxes are we paying? What did I miss?

            You live under this illusion, one of many it seems, that you win these debates. Let me try and help you here. Just because you may have stated something long ago and far away, or think that you remember you stated something, is not a citation. You and others continuously bash government workers. You just did it again by claiming they are over paid, and claiming wrongly that there is “no debate” they are overpaid. If you think there is “no debate” on this you are not paying much attention. You continuously claim that government is dependent on the private sector, rather than the other way around, and yet you toss off the contradiction that government employees should be banned from striking because their jobs are too important. What you have Rupert, is called cognitive dissonance. Actually that is not quite true. You would only have that if you actually recognized the contradiction in your 2 positions. Since you live in Rupert alternative reality land (Bush did not break the economy, Clinton did not run balanced budgets, supply side economics works, there is no global warming, taxes have gone up to pay for this, etc….) you have no recognition of your cognitive contradictions, which allows you to maintain your bliss.

            In a small way I almost envy you.

            “Wasn’t the last legislative session called under the emergency provision? I guess we’re living in a perpetual state of emergency. ”

            Yes, I think it was. but I think Bob was talking about emergency as in…you know…EMERGENCY! WE ARE GOING BROKE! WE MUST VOID LEGALLY BINDING CONTRACTS!

            For reasons stated, we are not in that sort of an emergency. Not wanting to pay more taxes is not an emergency. It is a chronic condition.

          • Steve Plunk

            Just off the top of my head I know the gas tax and registration fees have gone up to pay an ever increasingly bloated ODOT. For an agency full of engineers it always seemed funny how ODOT pays consultants to do almost all of their engineering work.

            So yeah, taxes are going up to pay for this garbage. Look at the growth of state spending adjusted for inflation and population growth. That money has to come from somewhere and that somewhere is the private sector. We are like cows kept to be milked.

          • valley p

            Gas tax increases have been well below the rate of inflation. You are paying LESS money today in gas taxes in real dollars then you were 20 years ago. Try something else.

            “Look at the growth of state spending adjusted for inflation and population growth. ”

            So what? There has been no spending growth relative to the size of the economy. We cut our property taxes and shifted school financing obligations to the state. We ordered new prisons and provided no means to pay for them. We have an aging population that qualifies for government help. We have more poor people thanks to George W Bush. All this costs money. And this is where your tax dollars are going.

            Rupert made a claim that taxes have gone up to pay for over compensated union workers. I’m still waiting to hear which taxes went up and when. Or will he pull one of his disappearing acts.

          • Steve Plunk

            While my property taxes have consistent risen 3% per year since the limitation my city fees have now eclipsed my property taxes on my business property and are on the way to doing that on my personal home. Oh, and look there, my school taxes have gone up $300 a year for a construction bond that is not subject to limitations.

            You asked what taxes have gone up and I have now given you multiple examples, quit moving the goalposts.

          • eagle eye

            Ah, the hazards of doing business in a leftwing hellhole like Central Point. You should move your business to Eugene! My property taxes have been well-controlled since Measure 5. Of course, they go up — it’s called inflation + growth of the economy. But they are well-controlled in my view. As a fraction of my total income, my property taxes are much less of a burden than when I bought my house.

          • valley p

            I have not moved a thing. Property taxes do not pay for state services. Thus they do not pay for state workers salaries or pensions. A bond to build new schools has nothing to do with worker salaries or pensions.

            Out of curiosity. Do you seriously expect your property taxes to go down year by year? If so, on what basis? The limitation we the people passed allows a 3% rise per year. And again, that is for LOCAL services, not state provided ones.

          • Rupert in Springfield

            >So what additional taxes are we paying? What did I miss?

            Off the top of my head cigarette taxes, property taxes, fees for everything from auto registration to drivers licenses to just about everything, fees for almost any school activity such as sports.

            I got my porperty tax assesment a few months ago, wow, the value went down by $30K and my taxes went up by $300

            You have seriously been sleeping through all of this?

            Amazing!

            >You live under this illusion, one of many it seems, that you win these debates.

            More like I live in reality and you cant form a coherent argument.

            In fact, you are so noted for inability to stay on topic and try and divert that myself and others continually point it out to you. Once you do that you lose the debate, sorry.

            >You just did it again by claiming they are over paid, and claiming wrongly that there is “no debate” they are overpaid.

            The majority of the states budget goes to pay for schools.

            The bureau of Labor statistics states that private school teachers make 60% of what public school teachers do.

            Administration in private schools? I seriously doubt it is less both in terms of compensation and numbers.

            Maintenance staff? No way will you ever convince anyone that a janitor in a public school makes less than private.

            So for the majority of the state budget – which is schools – we can go directly to the numbers and see that yes, teachers in the public sector are paid quite a bit more for doing the same job.

            You want to debate that? Get back with some actual numbers, this is round two on this topis and you still have nothing.

            You want to blather with nothing but Dean foot stomping?

            Sorry

            You lose.

          • valley p

            Welcome back. Cigarette taxes? We voted those down, and anyway you shouldn’t smoke. It makes you like Obama. Property taxes? We voted ourselves not one, but two cuts along with a constitutional rate limit. Increased fees? Too bad. Those are user fees. You don’t want to pay, then don’t sign your kid up for a sports team. Why should I pay for your kid to kick a ball around a field?

            Your property taxes went up? Check your assessed value against your appraised value. You are paying a fraction. And anyway Rupert, property taxes do not pay for state worker salaries so try again.

            Basically what you have, as usual is bupkess. Taxes have not gone up. You pay no more in state and local taxes in real dollars than you did in 1980. And before you say “real dollars” don’t matter, I have a 1-way plane ticket to Zimbabwe for you so you can get some experience with the fact that it does matter.

            “The bureau of Labor statistics states that private school teachers make 60% of what public school teachers do.”

            Rinse wash repeat. The majority of private school teachers are religious workers who teach as charity. No relevance whatsoever.

            The actual number is this Rupert. Taxes have not increased to support overpaid state workers, except perhaps for M66 and 67. You are flat out wrong and can’t admit to it.

      • eagle eye

        What most of you miss is that emergency or no, you can’t just tear up contracts. Neither can the state (of Oregon, in our case). It’s frankly childish to pretend otherwise. Whatever the answer is to the public employee pension problem, that is not it.

        LL is talking about not bailing out pension plans agreed upon between employers and unions. He is just saying “The federal government should just say no”. That at least is a real option.

        • Steve Plunk

          Eagle, Contracts are voided by the courts through bankruptcy. Perhaps a version of bankruptcy is the path to a fair retirement system.

          • eagle eye

            Maybe so, but bankruptcy for a state does not currently exist as a legal process. Would Oregon become a territory again, under federal control? That scenario has been seriously discussed in California (where insolvency really is a prospect). You want to have an asset sale, a possibility pointed out here before by several people? There is a lot of state property that could be used to pay down the pension, bond, and other state obligations. (And who knows what local public property is considered to be?) Highways, parks, universities — SOU could go private! — public schools.

            No, I don’t think we want to go there.

            Besides, the problem is not that drastic in Oregon.

            By the way, now that you’re done cooperating with government there in Medford, what are you going to do to fight government? I’m looking forward to the horsewhip outfit, but maybe you have something else in mind?

  • Tim McCafferty

    Lars, this is truly a sick rationalization.

    The Auto Workers, and Affiliated Unions all took deferments to past compensation already owed to help maintain operations for the past 30 years. The auto companies have been padding profits with deferred pension monies forever. Each negotiation the workers had left huge pension obligations, compensation for employment, and work already performed, left on the table to help the company. The unions have deminished, they are a whisper of who they were. The corporations have had it their way for 30 years, so where is the prosperity they assured us all?

    No money from taxpayers are going to bail out Union’s pension funds, the unions have negotiated reduced benefits accross the board, they have taken reduce wages, and have delivered a consistant growth in productivity for less pay, and benefits.

    What have the corporate executives done to earn their keep? Lead the industry overseas, and our economy down to the third world standard? Where are all those experts whom told us we didn’t know what we were talking about. Outsourcing was good, NAFTA would be fine. The CEO’s know best, and the unions are just greedy and lazy.

    They have been in the driver’s seat for 30 years, and look around, look where they lead! The same people who told us to hate the unions, distrust government, and believe only the private corporations knew anything are the same people blaming their mess on the unions and government.

    Is this an example of the “grown-ups” taking responsibility?? Does everybody that believes in their union become the problem, a Marxist, and Commie? Really? 30 years they have been spitting this venom, and what has it got ya? Got Limbaugh hundreds of millions, Glenn Beck is getting rich?

    So, how many more people are working because they listen to these people? Give me a break.

    • Steve Plunk

      Ah, the sound of union excuses. Whether it’s auto workers or government employees we consistently hear how much they have forgone in the past so we should give them more in the present and future. The government workers especially like to say “I could have made so much more in the private sector”. Nonsense, the reason they are in the public sector is they can’t compete or are to unmotivated to work in the private sector. Government workers did not become the stereotype they are for no reason.

      Auto workers have been killing the industry for years. High wage and benefit demands were always a part of negotiations even when overseas competitors were taking market share. Union work rules hampered productivity and now the legacy costs are approaching the equal of the actual labor costs in building a car. They bargained away the industry’s future and the executives went along for the ride.

      In both cases the common denominator is essentially borrowing in a manner that future generations will be on the hook for paying. We are leaving our children and grand children a bleak future all in the name some sort of warped compassion for the minor ills of today. What we cannot pay for we borrow for. I always thought it funny the way teachers would plead for children yet demand PERS benefits everyone knew would saddle those same kids with unfunded obligations down the road. They were either incredibly crass or incredibly stupid.

      So now that the results are in it has become obvious what damage unions have done to this country. If anyone should grow up and take responsibility it is the unions and their members. If any group violated the public’s trust it is the unions and their members. If there is any group that never needed a union it is government employees. Seriously, what good has a union brought to this country in the last 50 or 60 years? Now compare that to the life saving drugs, household conveniences, and futuristic lifestyle America’s business has brought to us. Our standard of living is what it is in spite of government and unions, not because of them.

  • rural resident

    For Lars and the various dimwits who believe that it’s the responsibility of the unions to fund pensions that are part of employee compensation:

    Unions …. aren’t ….. responsible …. for ….. funding …… employee …… pensions.
    Employers …… are.

    And for those who think that everything unions do is destructive, four words: West Virginia mining disasters.

  • Anonymous

    “the problem is not that drastic in Oregon”

    Oh alrighty then.

  • magic bus

    Another flash from Eugene, Oregon:
    Lane County Commissioner Faye (Stumps) Stewart grandson of the Timber Baron Stewart filed a 990 form with the IRS listing assets of $1,684,955,468 in U. S. Government Securities in his “Faye and Lucille Stewart Foundation”

    I realize Oregon politics might be of little interest to the rest of the nation but currently the IRS is looking into similar “Foundation” activities in several states as the one outlined below. The question is, why did $1,684,955,468 in U. S. Government Securities appear in a Foundation run by a Lane County Oregon County Commissioner and where did it go? In this time period the IRS had just changed how Foundations report funds held by “umbrella community foundations”. The sub fund were required to report their holdings held by the “umbrella community foundation”.
    The $1,684,955,468 is not a number that a tax preparer would enter without checking many times for accuracy.

    Faye (Stumps) Stewart Lane County Commissioner, the $1,684,955,468 man
    Election time is nearing for County Commissioners of Lane County. Ask Faye Hills Stewart II what the number “1,684,955,468” means. Hint go to https://www2.guidestar.org/ (after you register with Guidestar),

    use their search function on the name “Faye and Lucille Stewart Foundation”, go to the 990 tab, and look at the 2007 IRS form.

    On Page 30 of that PDF you will see 1,684,955,468 as value of U. S. Government Securities. Look at the years 2006, 2007 and 2008, where did the U. S. Government Securities come from and where did they go?

    Does that seem a bit odd that a Lane County Commissioner would have over one point six BILLION in a private Foundation? At best, this shows that Faye (Stumps) Stewart is incompetent to oversee financial matters, at worst…. I’ll leave that up to the reader.

    My wife and I had a problem in 2007 with another “not for profit” that Faye Hills Stewart II was a board member. Our concern was that the “not for profit” was “invoicing the federal government for services not rendered”, fraud.
    Could this be the reason Ol’ Stumps Stewart did not want people looking into his “non profit” business. Complete story at https://community.kmtr.com/forums/thread/2487504.aspx under Foundation Trilogy .

    Remember we were chased out of Lane County, Oregon at gun point. See video at https://www.youtube.com/watch?v=nQQ4ystsAWo

Stay Tuned...

Stay up to date with the latest political news and commentary from Oregon Catalyst through daily email updates:

Prefer another subscription option? Subscribe to our RSS Feed, become a fan on Facebook, or follow us on Twitter.

Twitter Facebook

No Thanks (close this box)