Pension Issue Surreptitiously Drives New York ConCon Politics

The New York Constitution mandates that a question be placed on the ballot every 20 years asking New Yorkers whether they want to call a state constitutional convention. On Nov. 7, this question will be on the ballot. If voters support calling a convention, their next steps are to elect delegates to the convention and then vote up or down any constitutional amendments proposed by the convention.

Fourteen states have similar periodic referendums. As I describe in a recent journal article, government employee unions, especially teacher unions, have in recent decades led the opposition to a “yes” vote, in terms of both organization and money.

The unions fear that a convention would reduce their bargaining power, especially over pensions worth hundreds of billions of dollars. These fears are highlighted in their communications to members. For example, in one widely used line, members are told, “If you stay home and don’t vote [on the convention referendum], that’s the same as voting against your pension.”

Pro-convention groups, attempting to defuse opposition from this 800-pound gorilla of constitutional convention politics, have usually claimed that a convention would not risk union pension protections. For example, Bill Samuels, who leads the advocacy group “People’s Convention,” argues, “there is no risk in New York State of labor unions losing their pension protections or other rights enshrined in our current constitution.”

But such claims have been ineffective because the unions have been too smart to be fooled. They are keenly aware of the public’s envy of government pensions, which tend to be more generous than private pensions, and fear a convention would enable the public to act on its envy. Supporting their fears, Princeton Survey Research Associates International found:

• 59 percent of Americans favor shifting current public employees from guaranteed pensions to 401(k)-style accounts.

• 72 percent of Americans are concerned their state and local governments may not be able to fund currently promised public employee pensions.

• 76 percent of Americans say pension reform should be a priority.

• 77 percent of Americans oppose reducing spending on services, like education, health care, so that public employee benefits could be paid at current levels.

• 78 percent of Americans say taxpayers should get to vote on pension increases for government employees.

• 82 percent of Americans favor requiring current public employees to contribute more toward their own future pensions and benefits.

Given these poll numbers, unions spending millions of dollars to protect billions of dollars is a no-brainer.

Unfortunately, unions’ presentation of their concerns to the public has been grossly misleading. As with any politically sophisticated special interest group pursuing an unpopular agenda, the unions have tried to exercise their influence in the shadows while framing their opposition in terms of popular causes and groups.

With both convention proponents and opponents avoiding the pension issue – albeit each for different reasons – no state in recent decades has included a thoughtful debate about public pension policy as part of the larger conversation on whether to call a convention. But if unions have good reason to believe that a convention would debate pensions – and I believe they do – then the public deserves to have that debate prior to voting for a convention on the November ballot.

Here are some questions to jumpstart such a debate:

• Why are government unions so concerned about preserving their pension protections? Is the public’s pension envy reasonable?

• How do private and government pension benefits compare?

• Why do government pension benefits have better protections than private pensions?

• Is it either efficient or just that only a small fraction of government employees – those who become fully vested after decades of work – receive the lion’s share of pension benefits?

• Is the principle of equal pay for equal work violated by the growth of tiered pensions, where there is a permanent pension benefits gap between new and old hires that perform the same work?

• If the public is ill-informed about pension benefits, how does accurate information affect their views?

• Why has New York’s contribution to its Employees Retirement System skyrocketed from 1 percent of payroll in 2000 to 20 percent of payroll in 2015?

• How are pension obligations crowding out funding for other government programs such as education, healthcare, and other social welfare programs?

• Why have unfunded pension liabilities reached $1.2 trillion nationally and $56 billion in New York City alone?

• Do unfunded pension liabilities violate the rights of future generations who cannot vote?

The periodic constitutional convention referendum was designed as an institutional mechanism – the only such mechanism in New York state – to allow the people to bypass a Legislature that either won’t reform itself or is unduly influenced by special interests. In the coming months, government unions will spend millions of dollars promoting the argument that a convention won’t function as intended. But perhaps the unions’ true fear is that it will function as intended – at least regarding the big-dollar issue driving their opposition: preserving the unpopular status quo on government pensions.