by Mitch Kokai
Senior Political Analyst, John Locke Foundation
While elected officials in the nation’s capital seem to be doing nothing to address the federal government’s long-term entitlement crisis, Michael Barone sees signs of a different trend at the state level. That starts with recent laws in Wisconsin and Michigan limiting unions’ power.
The Michigan and Wisconsin laws were partisan Republican measures, opposed by all local Democrats. Republicans have leverage elsewhere, as well.
They hold the governorships and legislative majorities in 24 states with 52 percent of the nation’s population (25 states with 53 percent if you count Nebraska with its nonpartisan single-chamber legislature). They also hold governorships but not legislative majorities in five more states with 6 percent of the nation’s population.
In contrast, only 13 states with 30 percent of the nation’s people have Democratic governors and legislatures. But even where Democrats are dominant there are stirrings of reform.
Consider Rhode Island, where Democratic state Treasurer Gina Raimondo has worked to limit the state’s unsustainable pension obligations. The state pension fund is currently paying out more to retirees than it’s taking in from current employees, and instead of getting an 8.25 percent return on investments, it has been getting 2.5 percent.
Rhode Island has hired Democrat super-lawyer David Boies to bring a lawsuit to reduce the state’s pension obligations. “There’s no contract,” Boies said. “Even if there was a contract, the state, pursuing the public interest, has the right to modify contracts.”
Or consider New Jersey, where Republican Gov. Chris Christie has famously opposed the public employee unions. He has formed a coalition with Democratic legislators with roots in private-sector unions.
Those Democrats, like Christie, argue that public employees should not get far more generous benefits and pensions than the taxpayers who are paying for them.
Another example is the state of Washington, where last week two Democrats joined with Republicans to form a new governing coalition in the state Senate. That wouldn’t have happened four years ago, when Democrats had a 31-18 edge.
But in the Obama years that margin was whittled down to 26-23, and with two defections the new coalition is ahead 25-24. It installed a supporter of charter schools and critic of teacher unions as education chairman and a skeptic on Obamacare as health care chairman.
If you look back on the great conservative public policy successes of the 1990s, welfare reform and crime control, the initiative came from the states and localities, mostly from Republican governors and mayors, but from many Democrats, as well.
Something similar seems to be happening on pensions and union contracts. A few large states, notably California and Illinois, are trying to solve their problems by raising taxes. The result seems to be unemployment above the national average.