McDaniel's record on PERS at conflict with campaign staff claims

*First published in the Laurel Chronicle newspaper

The long-term sustainability of our state retirement system is the greatest fiscal challenge facing Mississippi in the foreseeable future. It’s an issue that really presses my buttons. So when it got used as a political talking point in the U.S. Senate campaign, I felt compelled to respond.

PERS is the acronym for the Public Employees’ State Retirement System, which covers employees of state agencies, cities, counties, community colleges, universities, and school systems, including teachers.

There are a lot of voters – more than 90,000 retirees and 162,000 active members – who depend on PERS, rendering it a so-called “third rail of politics.” Any politician brave enough to even broach the issue of its long-term sustainability may have committed political suicide.

Which makes it all the more rare that an official would address the issue head on, but that’s exactly what Gov. Barbour did by creating a PERS Study Commission in 2011. The need for the commission was brought to a head when the economy fizzled during the Great Recession. The pension plan was already suffering from the irresponsibility of the Mississippi Legislature, which chose to grant retroactive benefits in the 1990s and early 2000s without paying for these massive new costs. Excessive benefit enhancements coupled with the market downturn crippled our system.

Taxpayers contribute more than $900 million annually to PERS, and costs keep on rising. In just ten years, taxpayer contributions have jumped 60 percent, largely because of the plan’s $15 billion in unfunded liabilities.

To put that into perspective: The state of Mississippi currently has about $4 billion in bonded indebtedness. What we owe to PERS in the future is nearly four times that amount! You get the idea. This isn’t sustainable.

Yet last week, Chris McDaniel policy director Keith Plunkett criticized Barbour’s efforts, saying his candidate “stood up against [the PERS study commission].” Plunkett implied that Gov. Barbour’s intention in creating the study commission was to change the cost-of-living adjustment for teachers and other retirees.

In his comments, Plunkett quoted McDaniel from 2011: “Misleading retirees and state employees as a political ploy is inexcusable.”

Amen. Now let’s examine who’s misleading who.

First: The executive order creating the PERS Study Commission specifically defined its purpose, which was to make “recommendations on improving the financial, management, and investment structure of PERS.” At no point did the order even mention “cost-of-living adjustment.”

Will Flatt, a financial expert and member of the study commission, explained on Facebook that “Governor Barbour only gave us direction to study PERS. He gave no specific judgment or pre-conceived guidance” on any issue.

So Plunkett’s story doesn’t add up on the first point.

His second claim was that Chris McDaniel opposed this plan to study the state’s retirement system. Let’s examine.

In 2011, the Miss. Senate passed S.C.R. 678 to “develop and make recommendations on improving the financial, management, and investment structure of the retirement system.” That language sounds familiar, doesn’t it?

A majority of the Senate, including Senator Chris McDaniel, voted in favor of the resolution. It was the right vote to make. The only reason S.C.R. 678 didn’t succeed is because the Democrat-led House of Representatives killed it. Only then did Gov. Barbour establish the study commission via executive order.

Plunkett’s claim that McDaniel opposed Barbour’s study commission is wrong based on verifiable legislative record, which leads me to draw one of two conclusions: Either Plunkett doesn’t know where his candidate stands on the issue (not a good quality for a policy director, mind you), or McDaniel now agrees with the Democrats who wanted to – and did – kill the PERS resolution.

Finally, back to that quote from McDaniel about “misleading retirees.” Remember that in 2011, Democrats were afraid (and rightly so) of losing their hold on the Miss. House, so they latched onto any issue that might give them traction. They used many scare tactics but none so aggressively as PERS. Democrats claimed Republicans were trying to dismantle the retirement system and balance the budget on the backs of retirees. This Democrat argument ultimately rang hollow with voters, who saw past this contrived political smokescreen.

Now it seems the McDaniel campaign is attempting to use those same Democrat tactics to confuse this legitimate issue during the heated Senate primary. It’s a bad political move and terrible policy.

State Senator McDaniel cast the right vote in 2011 to study the PERS system. Back then, he said the system’s exploding unfunded liabilities “could become problematic” in the future if not addressed.

But U.S. Senate candidate Chris McDaniel appears to have sacrificed sound policy for political expediency. Sure, PERS is a political hot potato. I get that. But that’s what elected officials are selected by voters to do – deal with difficult issues. That’s what the Chris McDaniel campaign has promised to do: Never surrender. Never back down. Lead the good fight.

If McDaniel backs down from PERS, will he back down from other serious issues, too? Being a U.S. Senator is no easy task, and it will take someone with strong convictions to get the job done. Mississippi can’t afford politicians who retreat at the first sign of political sensitivity.