Friday, August 15, 2008

Indiana Lawmakers Taking Care Of Themselves First

The Star's Matt Tully returns to the kind of reporting we've all been yearning for. He fills in his readers on the absurdity of the generous pension system Indiana lawmakers have devised for themselves at great expense to you. That's a pension system which requires you to contribute $4 for every $1 the lawmaker coughs up for his pension system. Your contributions amount to nearly 20% of lawmakers' annual salary. A financial planner, Tom Hardin, tells Tully you would be hard pressed to find a pension system in corporate America as generous as Indiana lawmakers' pension. Tully explains:


According to a file leaked to The Indianapolis Star and verified by state officials, lawmakers have contributed $3.6 million to their pension accounts since 1992, when they put the finishing touches on the system. During that same time period, taxpayers contributed $14.2 million to the lawmakers' accounts. (You can go to IndyStar.com to search a database showing how much the state has contributed to each lawmaker's account.)

The pension plan is among a set of perks that drew widespread criticism in recent years. In response to the criticism, the legislature voted last year to do away with the 4-to-1 pension match come 2009.

But until now, few have known how much taxpayers had paid into legislative pension accounts over the years. And, importantly, an analysis of the new retirement program crafted by lawmakers shows it is nearly as generous and just as self-serving as the old one.

The Indianapolis area lawmakers make off the best under the system because they are allowed a daily per diem even though they commute to work while the legislature is in session. As a consequence, their per diem payments are taxed as salary, which ups their annual contributions from the state. Rep. Bill Crawford and Sen. Bev Gard top the list. The state has contributed more than $130,000 to their pensions since 1992, while they each contributed a little over $32,000. Crawford, who has one of those high paying, make work jobs Ivy Tech creates for state lawmakers, gave this out of touch response to Tully. "We deserve a pension," he told me.
"Because he takes time off during the legislative session from his other government job -- a $77,000-a-year gig at Ivy Tech Community College -- Crawford said, 'I lose more money than I make during the session. Our work is a 365-day-a-year job, so there has to be recognition of that.'" Well boo hoo.

The only good news is that lawmakers have done away with the generous handout starting in 2009. True to form, however, lawmakers more than doubled the base salary upon which state contributions are based, even though the state contribution has dropped to 9% from 20% of their annual salary. That amounts to a drop in the bucket savings for Indiana taxpayers. The plan also allows lawmakers to become immediately vested in the system.

Unfortunately, the system Indiana lawmakers have created for themselves is similar to the overly-generous congressional pension system and that of many other state legislatures. When I worked for the Illinois legislature, it seemed to be an annual tradition for lawmakers to tweak the pension system in some way to benefit at least one of its members, such as allowing them to convert time from another government pension system into their legislative retirement system, which paid much better benefits. I recall when Sen. Paul Simon (D-IL) was running for president, the amount he disclosed as earning annually from his state legislative retirement accounts was far more than he had ever earned annually while serving in the state legislature.

Kudos to Matt Tully for his column today. Let's see some more reporting like this.

4 comments:

spooknp said...

More evidence why one is morally justified to cheat on the amount of taxes they pay into Bosma, Crawford, et. al. bank accounts, I mean the government.

Jacob Perry said...

Believe it or not, I've always liked Matt. But I mentioned to a friend this morning that every once in a while, he wakes up and says to himself "oh yeah, I am a journalist".

I have to wonder why this story has stayed out of the MSM for so long, as it's not exactly been a secret.

Jeff said...

Would be interesting as a follow up to go back and look at the double dip retirement accounts of all the Legislators that work for Ivy Tech.

Things have go to change.

Peace.

bill said...

WELL IF WE ARE USING MISSING MY OTHER JOB AND PAY AS JUSTIFICATION TO RIP OFF THE INDIANA TAX PAYER. THEN WE NEED TO PAY OUR MILITARY MEMBERS THAT ARE OVER SEAS FIGHTING FOR OUR COUNTRY 4X WHAT THEIR CIVILIAN JOB PAYS!