Mr. Bush says that during his tenure Florida was “the only state to go from a double-A to a triple-A rating,” in part because state pensions were among the best funded in the country. “So when states come hat-in-hand to Washington” looking for money, he says, “I would hate to see the really bad drunks getting more bourbon while the states that have done the right thing are penalized.” #

So new Republican governors should adopt rules for countercyclical budgeting and fully funded pensions? Too timid, Mr. Bush says. “I would argue for the elimination of the defined-benefit pension system. Might as well just get right to the end of the conversation, that’s where this is all going.” Then, “figure out a creative way to deal with the unfunded liabilities.” That “means you have to take on the unions.” He notes that New Jersey Gov. Chris Christie has so far “shown that you can take on these entrenched interests and be popular and sustain the efforts to change the state.” #

According to a staff presentation (.pdf) given to the House Appropriations Committee, the defined benefits plan was more than fully funded between 1999 and 2008, but since then, market declines have taken a toll. It has been underfunded in recent years, though it remains healthier than similar funds in many other states. #

You May Also Like