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May 03, 2013 08:55 PM UTC

Montana to Attempt a Colorado-style Breach of Public Pension Contracts. Montana Governor: It's Illegal, but What the Hell.

  • 3 Comments
  • by: PolDancer

MONTANA'S GOVERNOR SAYS TAKING THE PUBLIC PENSION COLA BENEFIT IS ILLEGAL, BUT HE'S SIGNING THE BILL ANYWAY.

COME AGAIN?

MONTANA GOV. BULLOCK: STATE PENSIONERS WILL WIN THEIR LAWSUIT OVER THE COLA TAKING.

If Colorado's former Governor Ritter (an attorney) had such views, he wasn't sharing them in 2010.  Many states just want to roll the public pension dice. If they lose their pension contract breach case, they have the status quo, and the courts become the "bad guys."  I guess we can at least admire Governor Bullock's honesty.

From mtprnews.wordpress.com:

"'We believe that ultimately when current and retired employees bring challenge to them that they will be successful,' (Gov. Bulllock’s Budget Director Dan) Villa said, adding the bill fixes the retirement system with or without the reduction in yearly raises which he said just make the fix more aggressive."

"(Association of Montana Retired Public Employees President Russell) Wrigg said he wants the pension fix bills to pass without the raise reductions (COLA taking) – he would prefer that to them (pension reform bills) dying through a veto.  He says the group will consider legal actions against the bills if the governor signs them, which is expected.  But, he doesn’t approve of the tactic."

"'Legislation through litigation is really not the way to solve our problems in this state,' he said."'

http://mtprnews.wordpress.com/2013/05/03/fix-to-state-retirement-systems-opposed-by-retirees/

My comment: "Legislation through litigation" is the strategy employed by the proponents of our Colorado COLA-theft bill, SB10-001. Recall Colorado Deputy Attorney General for Legal Policy and Government Affairs Geoff Blue's comments [he’s now in private practice.]  Geoff Blue notes that since Colorado’s education establishment has failed to win new revenues at the polls lately, they are now seeking to “legislate through the courts.”  "They’ve been losing so they’re trying to legislate through the courts.”  Breaking PERA pension contracts frees up funds for Colorado's education establishment.

http://www.youtube.com/watch?v=k0ZdUF0L8cU

This Montana situation is a first for me . . . I can't recall another instance, in which a Governor believes that a bill is unconstitutional, but signs it anyway.  When the Montana pensioner's case is filed it will be interesting to see how Montana's Attorney General goes about defending it.  The plaintiffs will certainly bring the Governor's position on the constitutionality of the pension COLA taking to the attention of the court.  The State of Montana as a defendant will have to argue in defense of statutory provisions that the Chief Executive of the State of Montana deems a breach of state contracts.

In the Colorado case, Justus v. State, there is a parallel in that officials from Governor Ritter's administration wrote a letter to federal regulators (GASB) after the 2010 COLA-taking contravening legal arguments made by the defendants.

You can read the entirety of the letter on the GASB site here:

http://www.gasb.org/cs/ContentServer?site=GASB&c=Document_C&pagename=GASB%2FDocument_C%2FGASBDocumentPage&cid=1176157387791

Colorado PERA active and retired members, are you as appalled as I am about the irrationality of the public pension debate in the United States?  Support public pension contractual rights at saveperacola.com.  Friend Save Pera Cola on Facebook.

Comments

3 thoughts on “Montana to Attempt a Colorado-style Breach of Public Pension Contracts. Montana Governor: It’s Illegal, but What the Hell.

  1. Hey Al, your phrase, "what the hell", for describing the Montana governor's apparent attitude in dismissing constitutional law (contract law) is quite fitting.  However, I am not very optimistic that contract law will be strictly enforced in the future, especially for public employee retirees.  I just got done reading the latest edition of Newsweek online, which had an interesting article on retirement.  People nearing retirement age are grossly unprepared, having very little net worth.  Indeed, the typical person over 60 has very little in the way of home equity or retirement savings.  

    My point … a big chunk of future government budgets will go to backfill income and services to the unprepared retirees, rather to meet public pension obligations.  A case in point … I know a couple approaching retirement, he's a self-employed handyman and she did childcare at home.  During the recession, his business suffered & they spent down their savings and home equity, and they never dis save for retirement.  Their current retirement plans include:  Supplemental Security Income for her (mood disorder), and monthly income for him via the Colorado Old Age Pension and un/under reported cash income from handyman jobs.  They both have Medicaid and food stamps.  In addition, they have free cell phones (aka Obama phones), energy assistance, and other benefits.  So, I've come to the conclusion that the average PERA retiree's benefit, which they earned over a 30-40 plus year career will not be significantly different from those on the dole.  In other words, a public pension will eventually equal being on the public dole, especially when the increased costs of Obamacare takes a higher share of income from retirees with resources.  The COLA for government income support benefits will likely surpass the zero to 2% COLA currently on tap for PERA retirees. 

     

  2. so…It seems the government is going to try help poor people by dipping into public pensions…instead of wall street portfolios…is that about right?

    1. Duke, we saw some corporate support for Colorado's SB10-001 in 2010.  The Secretary of State's website shows Colorado Concern lobbyists supporting the bill.  But, most of the 27 lobbyists working the bill were hired by PERA-affiliated employers seeking to cut their PERA pension liabilities by taking money from pensioners.

      Some corporations (hedge funds) are using political connections to suck fees out of defined benefit public pensions.  Others in finance support conversion of public DB plans to defined contribution plans (401Ks) in order to suck even greater fees out of public workers.

      Check out this recent Forbes article about our nation's champion of public pension COLA theft, Treasurer Gina Raimondo of Rhode Island.  Raimondo claims that the state can't afford to honor its contracts to pay pensioners their COLA, but somehow Rhode Island can afford to pay Raimondo's hedge fund buddies 2 and 20.

      "Rhode Island Public Pension 'Reform' Looks More Like Wall Street Feeding Frenzy"

      http://www.forbes.com/sites/edwardsiedle/2013/04/04/rhode-island-public-pension-reform-looks-more-like-wall-street-feeding-frenzy/

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