Pension Reform

2024 State Legislative Agendas, Unfunded Pension Liabilities, and TABOR: Lee Schalk on NewsTalkSTL

When states compete for economic growth, opportunity and try to create better economies, the American people win.

Lee Schalk, ALEC Vice President of Policy, recently joined Tim Jones, Gabe Phifer and Stel Pontikes on NewsTalk STL to discuss unfunded pension liability issues in states like Illinois, state legislative agendas for 2024, and the Taxpayers’ Bill of Rights in Colorado.

Regarding the concern for unfunded pension liabilities, Schalk stressed the importance of protecting taxpayers from future tax increases due to these unfunded liabilities.

It is a ticking time bomb. We looked at the unfunded public pension liabilities across the 50 states. It totals up to nearly $7 trillion nationwide. That’s $21,000 per person. That’s every man woman and child in the United States, and there are a couple of things to keep in mind here. We want to keep the pension promises that we’ve made to public sector workers. These are retirements that they’re relying on, but also, we’ve got to protect taxpayers. These are bills that are going to come due, and they will amount to future tax increases.

Regarding the ongoing debate on Colorado’s Taxpayer Bill of Rights (TABOR), Schalk highlighted the purpose and results of TABOR, the gold standard for state fiscal rules.

TABOR limits tax burdens and government spending to inflation plus population growth. If a government is collecting revenue above the TABOR limit, all of that gets sent back to taxpayers in the form of TABOR refunds. Now a ballot measure Prop HH is threatening to undo TABOR this November, and it’s really a bait and switch — an alleged property tax cut that will make TABOR refunds disappear.

Regarding state legislative agendas, Schalk pointed the positive actions taken in the Midwest states from tax reform to the adoption of education savings accounts and the education freedom movement.

The Midwest is getting increasingly competitive. Iowa came out swinging last year with both tax cuts, major tax reform flattening and lowering income tax rates but also with universal education freedom policies, education savings accounts that every student in the state is eligible for. We’ve seen the same thing in Arkansas with Governor Sanders and a great group of lawmakers approving universal school choice and seeking ways to lower tax burdens. It’s critical for states in the Midwest to step on the gas and not sit back and rest on your laurels.

Listen to the full interview below.

 


In Depth: Pension Reform

Modern, 401(k)-style plans are now commonplace in the private sector. For state workers, however, traditional pensions are still the norm. As former Utah State Senator Dan Liljenquist wrote in┬áKeeping the Promise: State Solutions for Government Pension Reform, this is not a partisan issue, but a math problem. State Budget…

+ Pension Reform In Depth