South Carolina governor Henry McMaster had a chance to lead earlier this year on long-overdue reform of the Palmetto State’s pension fund.
In fact we pleaded with him to do so (twice).
He failed … and now we know why.
Four months after approving an $826 million annual tax hike on South Carolinians to bail out the state’s woefully mismanaged pension found, McMaster now wishes to be viewed as a fiscally conservative “reformer” on this issue.
Just in time for his reelection bid …
In a letter submitted to leaders of the S.C. General Assembly this week, McMaster called for several changes to the state’s broken pension fund – including raising the state’s retirement age and moving new employees to a 401(k)-style defined contribution plan.
He also proposed that annual cost-of-living adjustments for state employees be voided unless such increases were fully-funded.
Here’s his letter …
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Do we support all of those changes? Absolutely … they are long-overdue.
The problem? McMaster has already given away the store.
There is absolutely no incentive for state lawmakers to change the current system because McMaster has already signed into law a massive bailout of the failed status quo.
State Senator Tom Davis – who is likely to run against McMaster in next spring’s GOP gubernatorial primary – made this point abundantly clear several months ago in a column encouraging McMaster to veto the pension bailout bill.
“I have heard this before,” Davis wrote. “Almost always – whether it’s roads, health care, K-12 education or whatever – the legislative response to a problem is ‘let’s spend more of the taxpayers’ money now and fix the system flaws later’ … and then later never comes. Let’s not let this happen with the pension bill.”
Unfortunately, McMaster let it happen … and now he has the audacity to pretend he is going to fix the mess he’s created?
Having already opened the floodgates and forced taxpayers to subsidize additional annual pension fund costs at a 20-to-1 ratio compared to state employees, McMaster long ago dashed any opportunity to achieve lasting changes to this system.
That makes his plan good for one thing and one thing only … campaign rhetoric.
Which appears to have been the point …
Responding to McMaster’s letter, Davis ripped his belated embrace of these long-overdue reforms as “nothing short of gubernatorial malpractice.”
“The time to get the plan reform the governor now says he wants was last session – back when public employees and retirees needed an extra $800 million per year bailout from the taxpayers to make the system solvent,” Davis said. “That was the leverage to get the plan reform, but he gave it away by failing to veto the bill.”
Amen to that …
(Click to view)
This isn’t the first time Davis has called out the governor for failing to protect taxpayers. During the debate over the state’s recently enacted gasoline tax increase, he accused McMaster of issuing a “drive-by veto” of the legislation – which denied opponents the time they needed to rally enough votes to sustain the veto.
Was Davis correct in his assessment? Hell yes …
What we are witnessing here is a very disturbing development, people – in fact, it’s a disturbing pattern.
Based on these decisions, it has become abundantly clear to us that Henry McMaster is more interested in running for governor than using the office for the good of the people.
South Carolina’s pension fund has been colossally mismanaged in recent years as managers appointed by former governor Nikki Haley and powerful S.C. Senate president Hugh Leatherman pursued foolhardy “alternative investment” approaches with state retirees’ money. In addition to some questionable self-dealing, these political appointees have doled out massive bonuses to the very bureaucrats who produced some of the worst results of any large pension fund in America (at the highest price, too).
Following the lead of state treasurer Curtis Loftis we’ve been all over this issue for years … unlike the state’s supplicant mainstream media, which only recently woke up to the looming fiscal disaster.
“This entire saga is yet another sad and costly reminder of why South Carolina will never move forward,” we wrote in an expansive report back in April. “Connected elites receive appointments that they use to enrich themselves, while politicians and media are asleep at the wheel. And when the whole thing blows up, taxpayers get screwed over while absolutely nothing is done to fix the underlying problem.”
McMaster had a chance to change that. He failed.
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