A: No. Pension sweeteners accounted for only 9 percent of the huge growth in the retirement systems’ shortfall from 1996 to 2011, according to a report by the Legislature’s Commission on Government Forecasting and Accountability. Insufficient employer contributions — that is, state government not paying its required share — caused 44 percent of the growth. Poor investment returns are another big factor.
Q: Would the amendment have any effect outside the state Capitol?
A: Yes. In addition to raising the vote requirement in the Legislature, it raises the requirement for city councils, school boards and other public bodies to pass anything that would increase pension costs, aside from higher wages.
For example, if a school board decided to offer teachers a financial incentive tied to performance, that would increase the size of the pension checks those teachers get when they retire. So the incentive plan would need a three-fifths vote to be approved. Critics say this invites a storm of lawsuits over exactly which changes would be covered by the amendment and which wouldn’t.
Q: What kind of problems do the retirement systems face?
A: Basically, they have the money on hand to pay out billions of dollars in pension checks over the next few decades. There’s no danger that pension checks will stop going out anytime soon, but at some point the retirement systems will need that money.
The money available now covers only 43 percent of what is owed in the long run, the worst funding level in the country. Making up that shortfall costs the state billions of dollars each year, which leaves precious little money to cover rising costs in other programs.
Q: What will it take for the amendment to pass?
A: There are two ways an amendment can get enough votes to be added to the state constitution. It can get “yes” votes from at least three-fifths of the people voting on the amendment itself or it can be approved by a majority of everyone voting in the election overall.
Secretary of state pamphlet explaining amendment (pdf): http://bit.ly/UMyQgf