While we ve been wrapped up in a 60-day legislative session that has included a variety of important policy issues (most notably on education reform), New Mexico policymakers, media, and the public have watched in detachment the ongoing government labor standoff now happening in Wisconsin.
So far, New Mexico has been relatively quiet on the pension issue, but that isn’t because we don t have a pension problem. We do, and as a percentage of GDP New Mexico s pension liabilities are actually greater than any state’s but Ohio and Wisconsin, both of which are attempting to make needed reforms.
Based on the Foundation s studies of the issue, the main long-term driver of our pension problems is continued over-employment in the public sector. Reducing the number of state and local workers in New Mexico to the national average (relative to the number of private sector workers) would save taxpayers in the state an astonishing $2.5 billion annually while reducing compensation to the national average for those same workers would save just under $700 million annually.
That money would reduce the number of future pensioners while freeing up a great deal of money to make good on already accumulated pension obligations. The problem is that, as we re seeing in Wisconsin, solving the government pension problem is not going to be easy or popular with the politically-powerful government employee unions.
And, New Mexico s Legislature is still controlled by people who are in thrall to government employee labor unions. After all, as was recently pointed out in the Albuquerque Journal, the American Federation of State, County, and Municipal Employees (AFSCME) handed out $592,300 in political contributions from last April through the end of 2010 while the supposedly mighty oil and gas industry handed out a mere $183,000 (30 percent of what AFSCME spent).
But, solutions do exist, if and when the political will exists to tackle the issue.
Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.