Two Sets of MD Pension Books: One with Real Salaries, the other Includes What Government Documents Refer to as "Phantom" Cost-of-Living Adjustments

As noted on numerous occasions, public union greed and arrogance has no bounds.

Worse yet, today we have yet another major example that shows many elected politicians still have zero political willpower to do anything serious about it. In Montgomery, Maryland, the politicians are even willing to cook the books for the benefit of unions.

Please consider Montgomery, Md., pension deal eases sacrifice for unions.

The politics of shrinking government spending can lead to tortured math and bureaucratic back flips. In one of the Washington area's wealthiest counties, recession has prompted a bout of creative bookkeeping and something called the "Phantom COLA."

As state and local officials from California to Miami have sought to cut payroll costs, officials in Montgomery County last year pressed government employees to forgo part of their negotiated pay raises. They did. But some of the county's powerful public employee unions also benefited from an unusual deal.

Employee pensions -- already a major cost -- will be calculated as if employees had received their full raises.

To manage that financial sleight of hand, county computer programmers must essentially set up two sets of books, one with employees' real salaries and another that includes what government documents refer to as the "phantom" cost-of-living adjustments.

"It makes no sense to base a pension on a salary that wasn't paid," said Montgomery County Council member Phil Andrews (D-Gaithersburg-Rockville), who cast the sole vote against the arrangement. "It's indefensible policy . . . and we can't afford it."

But the politics are not that simple in Montgomery, or elsewhere, as recession-squeezed budgets are forcing uncomfortable interactions between some Democrats and the party's allies in the labor movement, a significant electoral force. Rory Reid, son of Senate Majority Leader Harry M. Reid (D-Nevada) and a candidate for governor in Nevada, has questioned the sustainability of public-employee pay.

In a recent newspaper column, Willie Brown, the former speaker of the California State Assembly and former San Francisco mayor, took on the state's "out of control civil service." "We politicians, pushed by our friends in labor, gradually expanded pay and benefits" and layered on "incredibly generous retirement packages," he wrote. "At some point, someone is going to have to get honest."

Time To Get Honest Is Always

The time to get honest is always. The time to show leadership and face reality is now. A few politicians are facing reality.

Facing Reality

• March 12, 2010 Kansas City School Superintendent John Covington: Kansas City School District Faces Bankruptcy, Closes 29 of 61 schools; Every Child Left Behind For Decades


• March 11, 2010 Governor Christie, Las Vegas Mayor Oscar Goodman: Hardball In New Jersey, No Balls In Virginia; Brass Balls In Las Vegas


• March 2, 2010 New Jersey Governor Chris Christie: Governor Christie: "Time to Hold Hands and Jump Off the Cliff" - Chris Christie For President?


• January 25, 2010 Numerous Small Cities: Growing Movement To Disband Police Departments

Facing reality at long last and taking a leadership role are two different things.

The one person clearly taking an actual leadership role is New Jersey Governor Chris Christie. The governor continues to impress.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List