As 2018 comes to a close, its getting harder for Mississippi politicians to ignore the PERS crisis. And some are not. The Sun Herald reported recently on Coast lawmakers Brice Wiggins and Michael Watson acknowleding the elephant in the room. From the article:
Lawmakers who bring up the Public Employees Retirement System do so at their own peril, members of the Coast delegation said, but they say it needs to be brought up anyway.
“We have to have that conversation,” Sen. Brice Wiggins, R-Pascagoula, told the crowd at the Pre-Legislative Briefing hosted by the Mississippi Gulf Coast Chamber of Commerce. “When Sen. Tindell filed a bill, he got death threats. That’s crazy. In his case, he was trying to tweak it, to make it better able to do what Sen. (Michael) Watson was saying, extend it.”
Watson and Wiggins told the 200 or so people at the Golden Nugget earlier this week that part of the problem is PERS officials paint too rosy a picture of the state of the retirement fund.
“The executive director comes to the Finance Committee every year,” said Watson, a Pascagoula Republican. “And I literally ask just about the same question every year. And every single year, the answer is the same: We’re going to be fine; everything is OK.
“That’s what we’re fighting. You get the executive director of PERS sending out letters to all retirees, Everything’s fine. And the Legislature over here says, wait a minute, everything is not fine.”
And Watson said he’s talked to experts in the banking and pension industries who agree with the lawmakers.
“We’re in trouble,” he said. “We signed a contract. We can’t unilaterally back out of that contract. What we can do is rework the contract with two willing parties.”
The problem is clear. PERS doesn’t have enough money to pay all the present and future retirees.
Kudos to Wiggins and Watson.
Everything is not fine. That is said in the context of comparing Mississippi’s PERS crisis to other public pensions, which are also in an under-funded crisis. The passengers on the Titanic were not fine because others were on the same boat.
Mississippi is shrinking its government. Debate all you want about whether it should–but it’s a fact. Shrinking government payroll lowers PERS contributions. Pair that with the system’s unrealistic investment assumptions, and pretty much all experts agree that the crisis will get worse.
This is like a lot of problems. The fix gets more expensive the longer you wait to address the problem. Hoping lighting strikes in the investment markets isn’t a plan. It’s a prayer that’s unlikely to be answered.
Mississippi does not have the money to cover a huge PERS deficit. Adjustments to the system have to be made. This is not an issue that will only impact PERS participants. If you pay state taxes, your money is in play. The legislature needs to get on this in January.