C.T. Marhula, Grand Forks, Published March 15 2013
Letters: ND Legislature’s mistakes create a public pension messConservative pundits criticize public pensions without the courtesy of a fact check. Let’s examine the origins of the problem in North Dakota. Between 1979 and 2001, the Legislature increased the retirement formula by 200 percent and added unfunded cost of living increases. Funding increased by only 30 percent. Is it any surprise the fund is now 40 percent underfunded?
A perfect example is 2001 HB 1102, the last increase to pensions. What follows is actual wording from the Fiscal Note. “… no cost to the state … additional benefit payments … are taxable and will result in additional income and sales taxes being paid to the state.” Yes, the FN actually claimed increasing state payments would have no cost and would provide $301,500 additional revenue to the state. Only in Lake Wobegone and conservative North Dakota will an increase in state expenditures increase state revenue. The bill was carried by Sen. Ralph Kilzer, R-Bismarck, and Rep. Bette Grande, R-Fargo, passed unanimously and signed by the governor.
Currently, according to the state teacher retirement board, employees are funding 99 percent of their own retirement. This will increase in 2014. Local districts are funding 99 percent of the legislative unfunded increases at an annual cost of about
$5 million in Grand Forks. Why teachers and boards accept this is a mystery.
Hypothetically speaking, if you happened to teach 30 years and spend more than 30 years in the state Legislature starting in 1977, you were able to double your pension and give the bill to future generations.
The way forward: Today’s employees and taxpayers should not have to pay for past mistakes made by the Legislature. This is especially true in North Dakota, where there is a budget surplus. The Legislature should appropriate 33 percent of the shortfall in each of the next three bienniums. This will keep promises made to current retirees and not punish current employees. It would reduce employee and local taxpayer funding to 5 to 6 percent of salary from each – down from the projected employee 11.75 percent and district 12.75 percent rates.