Political partisans are teasing out great meaning from Tuesday’s victory for Gov. Scott Walker in the Wisconsin recall election. Strangely enough, though, his win simply fits a national trend in bipartisanship fixes for a giant hole in America’s public finances – a $4.4 trillion hole.
That whopping figure is the unfunded liability for the pensions of state and local government workers. These days, whenever elected Democratic and GOP leaders actually do the math on overpromised benefits to public sector unions, they often start to work together on solutions toward sustainable budgets. From 2009 through 2011, 43 states enacted major changes in state retirement plans. Most of those were made last year.
The heated national politics over Governor Walker’s reforms turned out to be not so heated in the privacy of the polling booth. Nearly 40 percent of those who voted for him were from union households, according to the ABC News exit poll. And 6 out of 10 voters – more than who voted for Walker – said a recall election should be used only for official misconduct, not policy disputes. (Walker was the third governor in US history to face a recall vote – but the only one to survive.)
In addition, a preelection poll showed only 12 percent of Wisconsin voters said “restoring collective bargaining rights” is a priority, even though national public-worker unions tried to make it the issue. Perhaps that is why President Obama stayed out of the Wisconsin fight except for a last-minute tweet of support for Walker’s opponent.
Also on Tuesday, two of California’s largest cities approved pension reform measures. More than two-thirds of voters in San Jose and San Diego backed reforms aimed at balancing city budgets. The measure in San Jose is aimed at altering retirement plans for current workers, not just future ones.
Voters generally don’t disparage civil servants or their need to be compensated as well as comparable workers in the private sector. Rather, they and many politicians simply worry that the rising cost of pensions and other benefits is crowding out other programs, especially during a slow economy.
In addition, as younger workers today change jobs more often, states want to move away from traditional pensions toward 401k-type plans.
Solutions, however, vary state by state, which is the beauty of America’s federal system. Even as a few states like Illinois falter in tackling their pension-system debt, others are setting good examples.
Rhode Island, for instance, was the first state to include current employees in pension reform. The reform is based on the idea that a worker’s future services – not their past service – should come under a new system of compensation. All of the reforms in Rhode Island, such as raising the retirement age from 62 to 67, have helped reduce the state’s benefits costs by some $3 billion.
For the millions of dollars that outside groups spent in Wisconsin trying to influence the election, voters there seemed to have made up their mind long ago about reforming public-sector entitlements. This shows that local realism, rather than national politics, often helps states and cities find answers across partisan lines.
Now if only that spirit of cooperation and innovation could seep up to Washington.