We thought we had all the recent atrocities covered but within a day of publishing yesterday's atrocities, another one came to our attention that needs to be exposed. Remember, in these difficult economic times, unemployment is high, tax revenue is low, and state and local governments are struggling to stay financially solvent and still provide basic government services.
Thus, city government's like Philadelphia should be trying everything possible to protect its taxpayers and its declining revenue stream. However, in Philadelphia that is not the case, at least with regards to one city councilwoman.
But first some background, as I understand it. Philadelphia implemented a city pension program option a little while ago called DROP, Deferred Retirement Option Plan. In 1999, the city government was worried that the city's baby boomer employees would retire in one large movement, leaving the city short of trained employees, firefighters, and police officers. The DROP program was designed to keep current employees on the job, for up to four years, while they trained their replacements.
Those that sign up for DROP keep getting their regular salary, but also get a pension payment while they continue to work. The city puts the pension payment in an account that earns 4.5 percent interest. When the employee finally retires for real, he or she gets their pension money in one big lump. Most of that is money the employee would have gotten from a normal retirement anyway, but there is that extra from the interest as well. And remember that the employee has been getting a regular salary all that time too.
The theory of the program is that seasoned, expensive city employees would hang around, with the above financial incentive, to train lower priced inexpensive replacement employees. The net financial impact should have been expense neutral, pay expensive employees a little bit more now to train less expensive new employees for the long term.
However, that is not how the program worked out. According to recent news reports, the program has paid out more than EXTRA quarter billion dollars since its inception and costs the city $22 million more a year than if the program did not exist. This is just another burden on a city having dire financial problems, a city which had to raise taxes last year to cope with the budget woes.
But I digress. The real atrocity is related to a Ms. Marion B. Tasco. The DROP program became so attractive that the Philly political class made it possible for the council members to participate in DROP even though the program was originally targeted only towards regular, ordinary city employees and not elected officials.
The politicians are not hired by the city, they have no need to stay on the job longer to train their replacements since they are elected by the citizens. However, this did not stop the council members from voting themselves into the benefits of the DROP program, a program that was never intended for politicians.
And the bad part of the program is that these politicians can serve in their elected positions, retire for one day and one day only under the DROP program, collect an enhanced lump sum pension payout, and then go right back to being in office, assuming they were reelected in the previous election. Understand the sequence: get elected, serve in elected office, sign up for DROP, get reelected, retire for one day, collect a really large lump sum pension payment, and the next day start serving in office again.
Which is exactly what Ms. Tasco did. On the last day of serving her sixth term as a Philly councilwoman she retired, collected a lump sum pension payment of $478,057, and then went right back to work the next day to serve her seventh term, with half a million dollars in her bank account. And she is not the only politician to avail themselves of the program. Numerous other council members also have managed the same maneuver, each receiving payouts of over $100,000. However, the majority of them did exactly what the program was intended for, they actually retired and are no longer drawing city pay checks.
But Ms. Tasco seems to be unique in a number of ways. First, it appears from Philly news reports that she received one of the highest payouts, just under half a million dollars. Second, while some of her peers actually did permanently retire after getting their DROP-related lump sums, she went right back to work to serve her seventh term and did not retire. Third, she sponsored a bill that would continue the program that was vetoed by the mayor but whose veto was overturned by the same people that benefit most from the program, the city council members.
Atrocities at every level of government now seems to be the norm. At least in Philly, the mayor is trying to do away with an expensive, unneeded government expense that has been tailored to give politicians an unwanted and out of proportion enrichment. The same cannot be said for most other political "leaders," whether it is the politicians in Illinois that allowed their lobbyist friends to get into the teachers' pension system after teaching for exactly one day or the political class in Washington that refuse to police themselves, allowing political cronies like the ones in Fannie Mae and Freddie Mac to continue to receive over sized bonuses or the exemptions they grant themselves from insider trading laws, whistle blower laws, etc.
We truly have devolved into a society where an elitist, pampered set of politicians have managed to hijack our political processes and place themselves above the law, below integrity, and in the midst of corruption. Only by forcing a change in those hijacked political processes can we finally move out of atrocious and into integrity in the city halls, state capitals, and streets of Washington D.C.
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http://www.cato.org/
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http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment/
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