Policies trigger overreactionPublished 9:53pm Monday, October 3, 2011
As the last minutes ticked away on the 2011 Legislative Session last June the last major bills were getting final approval. In the waning hours the legislature finalized the state’s education and general fund budgets. Along with these budgets were accompanying acts that increased state government employees’ retirement contributions across the board.
These bills will save the state $100 million and save 1500 jobs. However, state employees will see their contributions climb from 5 to 7.5 percent of their paychecks. In most cases this will cost the average teacher and state employee about $1,500 per year in take home pay. In other words, all state government workers are taking a significant pay cut. This cut in pay went into effect October 1.
On that last night of the session when the final bill passed requiring the increase in retirement contributions, I walked down the halls of the Statehouse and asked every legislative employee what they thought about essentially having their income reduced by over $100 per month. All I got were blank stares. It was obvious they had no idea that their salary had just been sliced.
If this was the case for the legislative employees at the Statehouse it had to be the same for other government workers throughout the state. If they were not aware of their fate they are now. The measure went into effect 5 days ago and I bet a few legislator’s phones are ringing.
Folks, this retirement contribution affects every state employee, every teacher and school employee, every university employee as well as everyone in a county or city retirement system. Every reasonable and prudent financial consultant and retirement official confirmed that actuarially it had to be done. The state simply could not afford to absorb the cost. Even Gov. Bentley called for the action in his March 1, 2011 State of the State Address to the legislature. Basically, all Republican members of the House and Senate voted for it and all Democratic members voted against the measure.
It is basic public policy theory that you either have to raise taxes or reduce government services. It has become a cardinal sin in Republican politics to even say the word tax much less enact any increase in tax revenue. Our legislature is now overwhelmingly Republican and they are real Republicans. Therefore, it is doubtful that you will see any tax increases anytime soon.
The last time any new taxes were enacted in Alabama was during George Wallace’s last term in the early 1980’s.
That was nearly 30 years ago.
Wallace was really a progressive populist at heart. He was a child of the Depression. Most folks in that generation are gone. They were the last of the progressive liberal New Deal Democrats left in the Deep South. They saw what Roosevelt’s New Deal did for Alabama and what it meant for a lot of Alabamians and they did not think that big government was all bad. Wallace believed he was for the little man and occasionally the little man needs a little help from the big government.
However, Wallace could not bring himself to call his tax increases what they really were. Instead he referred to them as revenue enhancement measures. Wallace would always say there’s not a dime’s worth of difference in the Republican Party and the Democratic Party. He was wrong. There is a dramatic difference.
Today’s Republican Party in Washington and Montgomery believes in no new taxes and less governmental services, while the Democratic Party believes that you sometimes need to raise taxes to help poor people and balance the federal government.
This basic division is being exacerbated by extreme partisanship brought on by legislative and congressional districts drawn to suit ideological extremes. William Galston of the Brookings Institution says, “Both the electorate and political parties are growing more polarized but the parties have moved farther to their respective sides of the spectrum than the public has.” The result has been a series of public rebellions in reaction to ideological overreaction by both parties.