Warren Buffett’s word is liberal gospel when he talks about the inequities of the tax code. But there was considerably less rushing to his side when, Monday, the guy who says he shouldn’t pay a lower tax rate than his secretary (nobody’s stopping him) sounded off on the looming disaster posed by public pensions.
According to Bloomberg News: “Citizens and public officials typically under-appreciated the gigantic financial tapeworm that was born when promises were made,” Buffett wrote in his annual report to shareholders of Berkshire Hathaway Inc. released on March 1. “During the next decade, you will read a lot of news – bad news – about public pension plans.”
It is precisely this sort of trouble Republican leaders in the Legislature are attempting to head off in this year’s session, which opened Tuesday. Speaker of the House Will Weatherford, of Wesley Chapel, is again championing a switch to a defined-contribution program, much like a private-sector 401(k) plan, for new employees. Sen. Wilton Simpson, of Trilby, has a similar proposal, but adds the option of a “cash-balance plan” that would shield workers from stock market losses in exchange for slightly limiting overall gains, and leaves out first responders (police, firefighters).
The goal of each is to slowly ease the state’s unfunded pension liability, which stands at $21.6 billion. The Legislature spends $500 million each year to meet its obligation more than ease the state slowly off the hook, money.
It’s looking like another uphill battle, however; some more moderate Republicans, such as Pinellas Sen. Jack Latvala, remain resistant to change.
Buffett, again: “Local and state financial problems are accelerating, in large part because public entities promised pensions they couldn’t afford. Unfortunately, pension mathematics today remain a mystery to most Americans.”
Most Americans includes some key lawmakers, it seems.