Promises Made, Promises Kept?

December 24, 2018 Gary Aiken 0 Comments

Testimony before the Board of Supervisors on Pension Reform, 20 Nov 2018

The Board of Supervisors must adopt the amendments to the plan advanced by Supervisors Herrity and Cook.

But even those reforms only go part of the way towards ameliorating what will be a difficult scenario for future Boards of Supervisors and the citizens of this County. Future Boards will be forced to raise taxes again and again to pay the mounting benefits.

It is not just that the plans, in their current forms, are generous. Fairfax’s position parallels Illinois, New Jersey, Social Security and Medicare. It’s akin to the problem that forced General Motors to deliver 17.5% ownership to its Union’s Health Care Trust in bankruptcy and the one that cripples General Electric now.

People are living longer and the longer they live, the more healthcare dollars they spend.

It is wonderful that we are living longer and fantastic that medicine has improved all of our lives. But we must address the reality of longevity on Fairfax pensions: our assumptions wildly underestimate future cash costs.

It is vital that we honor the police officers, fire fighters, teachers and workers who make Fairfax County a wonderful place to live and work. Honoring them means telling them the uncomfortable truth.

Our current compensation practices are unsustainable and antiquated. Fairfax County must modernize its compensation practices.

Assuming the Board of Supervisors adopts these modest changes, more reforms will be necessary. The Board of Supervisors must lead. You must honestly tell our government workers, policemen, firefighters, and teachers that you will no longer promise lifetime benefits. You must strike a new deal with new workers. Make a clean cutoff so that we stop incurring post-retirement liabilities. You must strike a compromise with workers who have time to plan and adjust. You have a moral duty to pay the promised benefits to those who cannot adjust. You must be frank with citizens about why their taxes must increase.

These are tough choices. Adopting the proposed change is the right choice today. Still, Fairfax County will be forced by dollars and sense reality to adopt further reforms and tax its citizens at ever higher rates into the future to pay for services rendered long ago. Or, we can lead. Our willingness to solve our pension problem might give support to other cities, counties, states, and maybe even our federal government to get their houses in order, too.

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