and the
Citizens Economic Research Foundation

Barbara's Column
June #3

Pension abuse costing us taxpayers plenty
by Barbara Anderson

The Salem News
Friday, June 16, 2006

As summer officially arrives, I understand and relate to the desire to forget about politics and set aside citizen outrage until Labor Day.

Maybe if I were retired on a pension of $140,000 like the Brockton cop who scammed the pension system, I could escape to someplace without news, where ignorance would be bliss. Join me in my fantasy if you want.

OK, that was fun. But time-out is over and reality is still here. There is no escape, and even if there were, my prospective Social Security check won't cover it.

Private sector working people: To fully appreciate this column, check your annual letter from the Social Security Administration that tells you what your monthly check will be when you are finally eligible for full benefits sometime after age 65.

Add any monthly amount you might get from any private sector pension, if you work for a company that still provides them, and if you think it will still be there for you when you retire. Add anything extra you might have saved or wisely invested. See if it adds up to $11,648.99 a month.

Naturally, as a taxpayer activist, aware of how my tax dollars are wasted, I've taken as many tax breaks as possible. Each year my accountant friend tells me how much tax-deductible income I can put in my personal bank IRA. He wants me to use a Roth-IRA, pay taxes now but withdraw it tax-free. Pardon my paranoia, but I don't trust the government to keep that promise either.

Not too far down the road, when national, state and local governments crash into the unfunded "fixed benefit" pension, lifetime health insurance, Social Security-Medicare liability, national debt wall, Ted Kennedy will bellow that we must "tax the rich," defined as all those people who have money in a Roth IRA. My accountant friend says this cannot happen, that there would be a revolution.

Really? Then let's practice revolting now, over the revolting Brockton cop and his revolting pension. Let's make Charlie Bradshaw Lincoln the Clarabel Ventura remember her? the welfare mom whose abuses sparked welfare reform? of pension reform.

The story began with a report from Inspector General Greg Sullivan about one Charles Bradshaw Lincoln, who was a Brockton policeman and a security officer for Plymouth County at the same time, for the final three years of employment that count toward a pension. Naturally he also found time to do "paid details." In order to fit this all in, he called in sick from his cop job 251 times. His pension is now $11,648.99 a month similar to what many taxpayers who provide it may get from Social Security in a year. He gets heavily subsidized health insurance too, without waiting for Medicare at 65 like we peasants do.

Yes, we must blame Lincoln himself for scamming the system; Sullivan recommends that his pension be recalculated by "subtracting the total value of his fraudulent sick days." But of course the real fault lies with the politicians who created the public pension system for the benefit of themselves and their friends.

The Pioneer Institute has just released a white paper that explains how the system works and lists the many abuses. Note that the median retiree is 58 years old, not 66, and gets nearly $27,000 after just 22 years. Far above the median, you have Charlie Lincoln and Billy Bulger, who gets almost $180,000 a year.

Early in my taxpayer activist career, I was invited to address a class of graduate students at UMass-Boston. Many in the class were public employees, and one of them told me that if I wanted to address state spending, I should do something about state pensions. He explained that they too easily become the reason for either choosing or for staying in a government job, with the goodies at the end of the relatively short road a reward for going along to get along.

I'd hoped that limiting and cutting taxes would create an incentive to address at least the abuses. But easy money in the form of tax hikes can cover any abuses and then encourage more, and they have.

Heading into his campaign for president in 1988, Gov. Michael Dukakis balanced his state budget by raiding the state pension fund. When Dukakis returned to Massachusetts, several tax hikes covered the abuse, and allowed the pension liability to drop again. We are still paying for that with a higher income tax rate.

Pioneer makes several recommendations for reform, some of which are being proposed by Lt. Gov. Kerry Healey as part of her gubernatorial campaign. You might take it on vacation instead of the awful James Patterson beach books.

According to Pioneer, we taxpayers have paid billions of dollars beyond what a fair and reasonable system would cost. If anyone asks you how the state would pay for the voter-mandated income tax rollback, pension reform is one answer.

While we're at it, let's allow paid sick days only for sick people, and fire anyone who cheats and lies.

Summer is coming. Huckleberry Finn, make room on the raft for me.

Barbara Anderson is executive director of Citizens for Limited Taxation. Her syndicated columns appear weekly in the Salem News, Newburyport Times, Gloucester Times, (Lawrence) Eagle-Tribune, and Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in the Providence Journal and other newspapers.