Cincinnati City Workers’ Pensions Under Attack by Many Tea Party Groupsby Linda Gosnell
Nov 5, 2013
Organize to Defend City Workers’ Pensions! Defeat Issue 4!
Well, the tea party is back at it again. This time they are attacking city workers’ retirement pensions. American Exchange Legislative Council (a Koch Brothers supported group) are behind the attacks to privatize public workers’ pensions. Another Cincinnati tea party affiliate is COAST (Citizens Opposed to Additional Spending and Taxes). The tea party people demonstrated against Wisconsin and Ohio workers when our unions were threated 2 years ago. The tea party is for destroying workers’ organizations; our health care, our wages, our retirement, our working conditions and collective bargaining. They won the right-to-work law in Indiana and Michigan; really, it is the right-to-work-for-less law. And for less essential government services. They won in Wisconsin and they lost in Ohio. The tea party wants to snatch Cincinnati City workers retirement pensions and place the funds in Wall Street. The tea party is no friend to working women and men.
Issue 4, an amendment to Cincinnati’s charter, that was put on the ballot by the tea party’s, Cincinnatians for Pension Reform, will be on the November 5, 2013, ballot. The fight against this measure is an important struggle to keep city workers’ pensions intact. Actually, the city has already made cuts to the Cincinnati Retirement System pension fund—twice since 2008. The city has forced retirees to get less money in their old age. And, city workers aren’t eligible for social security benefits—their pensions are all they have when they retire. (Unless at some point they worked for private companies where they and their employers paid into Social Security.)
What’s Wrong with Issue 4?
Issue 4, if approved by voters would semi-privatize Cincinnati’s pension system for city workers, present retirees and future retirees. They’ve got a scheme. The workers’ pensions would be in individual retirement accounts. The tea party’s friends—the Wall Street bankers and brokers would then be able to get their greedy hands on these workers pension funds. The idea is to move from a public plan, the Cincinnati Retirement System, instituted in 1931, and instead implement 401K plans in the private sector, where millions of dollars of working and middle class people’s savings were lost in 2008.
The conservative Buckeye Institute, which supports Issue 4, previously studied that proposal and found it could greatly reduce retirement benefits for city workers. Another study from a finance professor at Xavier University found Issue 4, if approved, could force the city to cut essential city services by 41 percent or raise taxes.
Another problem for the city is their Social Security exemption. Right now, the city doesn’t have to pay into Social Security. If Issue 4 passes, the city might lose its exemption which could force costly payments to Social Security by the city. This would cost the city more than paying into the Cincinnati Retirement System. The city workers would be paying 6.5 percent of their wages into Social Security. Issue 4 promises to strengthen the city budget but will end up costing the city millions of dollars and cutting essential city services to the residents of Cincinnati.
And if the city doesn’t lose its exemption, city workers would be left with only individual retirement plans without the necessary Social Security retirement pensions, like private sector workers have, because the city workers could not pay into Social Security. City workers who are disabled or who become disabled aren’t even mentioned in Issue 4. And there is no provision in Issue 4 for health care/medical care coverage for city worker retirees, presently or in the future.
Who Is Backing Issue 4?
The group, Cincinnatians for Pension Reform, spent $70,000 to collect the required 7,443 signatures to put the charter amendment, Issue 4, on the November 5 ballot. The money to fund this amendment came from tea party groups in West Chester, Ohio—a suburb of Cincinnati in Butler County. (Cincinnati is in Hamilton County.) These groups go by the name of Jobs and Progress Fund, A Public Voice, Ohio 2.0 and Ohio Rising. Some $20,000 came from the Virginia-based Liberty Initiative Fund, Paul Jacob, President. The Liberty Initiative fund is a supporter of pension privatization schemes around the country. Some of this information was in the financial disclosure form filed in the Hamilton County Board of Elections on 10/24/13, according to the magazine “City Beat.”
Chris Littleton, a consultant for Issue 4, is based out of West Chester, Ohio, which is also home to John Boehner, Speaker of the US House. Chris Littleton is involved in Ohio Rising and Ohio 2.0. He helped found the Cincinnati Tea Party and the Ohio Liberty Coalition, another Tea Party grouping. The Ohio tea party’s goal, Mike Wilson, a member, said two years ago that they want to make Ohio a right-to-work state. The group supported SB5, Issue 2, which tried but failed to take away collective bargaining from Ohio public workers in 2011.
What Should We Do?
This recent struggle is starting off as a voting struggle; presently there are talks in the Ohio government of limiting early voting for the November 5 voting day which will hurt seniors, students, disabled persons, African Americans, and workers—all of whom need extended voting hours. The workers’ unions aren’t really organizing working people against this amendment to the city charter. The city mayoral and city council candidates, the Cincinnati USA Regional Chamber of Commerce, labor unions and I think, the main newspaper, the conservative Cincinnati Enquirer are against passing Issue 4.
Cincinnati is an important marker for how other cities deal with their own pension deficits and budget deficits. Cincinnati is the third largest city in Ohio behind Columbus and Cleveland. The majority of Cincinnati residents are African American. Cincinnati is also the 56th largest city in the US. Cincinnati’s 2006 population was 332, 252 persons. There are 6,000 full time Cincinnati city workers of which 1,800 are police and firefighters. An additional 2,000 part time workers are hired in the summer in the Parks and Recreation departments. 11 percent of Cincinnati workers are in government jobs.
To add to the city’s woes, the credit ratings agency, Moody’s, cited Cincinnati’s large unfunded pension liability of $862 or $879 million (depending on what you read) as one of the reasons it downgraded the city’s bond rating this past July. Where did the money go?
Cincinnati is not the only city facing these problems. Detroit, Chicago, Baltimore, Pittsburgh, Providence, R.I., and San Bernardino, California, are among the many cities facing shortfalls in their pension funds. The pension shortfalls were caused in part by the stock market crash in 2008, the Great Recession, the housing/mortgage scams involving selling bad mortgages as securities on wall street, with over a trillion dollar ($1,000,000,000,000) bailout to the banks and corporations. Wall Street robbed working class and middle class Americans of a chunk of their 401K savings in the Great Recession; money many seniors were going to retire on. Now Wall Street wants to rob city workers of their public pensions. A 2010 study from Northwestern University found the unfunded pension funds for all US cities and counties stood at $574 billion. Who’s going to make up the difference?
City workers across the country should organize and fight back against the governments who are robbing them of their pension funds. City-wide and state-wide strikes should be held to put the local governments on notice that enough is enough! City workers like teachers did not cause the current budget and pension crisis.
Further, our seniors need enough money to live on in old age. The public pension funds, the 401K funds, Social Security, Medicaid, Medicare and the food stamp funds, we are told, are entitlements but they are really earned benefits that working and middle class people have worked for. They are the necessary cost for when we grow too old or too disabled to work or we have no jobs or our jobs pay too little. We, working and middle class people, have paid for our pensions, our Social Security, our Medicaid, Medicare, food stamps with our wages and from the taxes taken from what we’ve worked for. Our savings are being stolen!
While pension funds should be at least 80 percent funded to be considered healthy, Cincinnati’s is only about 61 percent funded. Its unfunded liability what it owes to current and future city retirees now stands at $862 million—which the city doesn’t have. Where did the money go?
The fight against Issue 4 is only a small part of what we need, but it is an important part. Turn back Issue 4 on election day!
Editorial from Cincinnati.com; 10/14/13; City Beat, 10/24/13; AFL-CIO, aflcio.org/cincy; Cincinnatiaflcio.org; Huff Post Politics; Cincinnati Retirement System memo to actively employed Members of the Cincinnati Retirement System: 9/24/13; Memo from City of Cincinnati City Manager to the Mayor and Members of City Council: 8/5/13; Petition for Submission of Proposed Amendment to Charter