Salina Journal News | Taxpayer group takes issue with pensions

Findings from TUA’s pension project on Saline, Kansas, are featured in this article at the Salina Journal News.

Salina City Manager Jason Gage said Friday he would be “happy to retire” on the $2.35 million pension payout a national taxpayer advocacy group said Wednesday that he would take home after 35 years of working for the city.

The problem is that the numbers, released by Taxpayers United of America at a news conference in Salina, don’t add up.

“I probably won’t even get half of the $98,069 (his estimated annual haul),” Gage said with a laugh while looking at Taxpayers United’s data. “These are totally inaccurate.”

Taxpayers United of America released a list of the current Salina and Saline County employees and Salina School District teachers whom the group calculates could become eligible for the highest pensions.

Christina Tobin, vice president of Taxpayers United of America, released the information a day after hand-delivering a letter to Gov. Sam Brownback about the need for pension reform. She also spoke at a news conference at Candlewood Suites, 2650 Planet.

According to the group, the city and county employees and teacher who could be eligible for the highest pensions would be: Salina Police Chief Jim Hill ($2,878,529), Saline County Sheriff Glen Kochanowski ($2,041,290) and teacher Roanne Stein ($1,088,032).

“Property tax increases are paying for these multimillion dollar payouts,” Tobin said.

But Gage said the estimates are misleading because the salaries of employees vary from year to year and the group doesn’t take into account the average tenure of employees and the average life expectancy.

Gage’s average yearly gross salary, or total compensation, is around $150,000. His pension rate, based on the 11 total years he has been at the city, is $28,875. Even if he works for the city for 35 years — an additional 24 years — he would take in $91,875 a year, not $98,069.

He accused the group of using misleading information to “take advantage of the press.”

“If you torture numbers long enough, they will confess to anything,” Gage said. “I think they tortured those numbers quite a lot.”

Calculating the pension

Tobin said the group spent three months compiling pension data and is making trips across the state to detail its findings.

The group makes a number of assumptions in calculating the pensions. First, it assumes the person in question earned his or her 2010 salary for 35 years. The group also assumes the person retired or will retire at age 62 — or 55 if the person worked for a police or fire department — and didn’t receive cost-of-living raises. Also, several employees who have not worked for the city, county or school district for 35 years made the list, and pensions from prior public-sector employment were not included in the calculations.

All compensation used

Rae Ann McNeilly, director of outreach for Taxpayers United of America, said the group estimated the total payout of pensions to employees by requesting the gross salary of every employee from the city, county and school district.

Since the group requested gross salary, the figure included all compensation paid to the employee.

Gage’s base salary for 2010 was $132,000. However, including a car allowance, vacation buy-back and other stipends, his total compensation reached $160,112. He said the 2010 salary doesn’t reflect the total amount he is paid each year, and he has received around $150,000 with stipends in 2009 and 2011.

He said other salaries on the list appeared to be incorrect because of vacation buy-backs from retiring employees.

“Most of our employees have wages only, but some may or may not have overtime, which we have significantly cut in the past four years,” Gage said. “Some employees have automobile allowances, and the city allows vacation buy-back. This affects gross salary but isn’t the same each year.”

Didn’t work for 35 years

Gage also pointed out that many of the people on Taxpayers United of America’s list of pensions for city employees no longer work for the city and didn’t work there for 35 years.

“About 30 percent of them on the list no longer work with the city,” Gage said. “When seven out of 30 don’t work there, it throws the numbers way off.”

He said the average employee works for the city for 12 years, making the group’s calculation of 35 years of employment almost three times that amount.

“To make the presumption everyone is going to be here for 35 years is stupid, or their motivation is disingenuous,” Gage said.

McNeilly said the group believed the only way to compile the data was to treat all employees equally based on their salary.

Average age of 85?

The group estimated police and firefighters would receive 79.99 percent of their 2010 salary for 30 years after retirement and other employees would receive 61.25 percent of their 2010 salaries for 23 years after retirement.

Both calculations estimate public sector personnel will live to be 85 years old if they retired at 55 or 62.

“The average life expectancy for a male is 75.6 years,” Gage said. “Either they know something about my health or they are making gross assumptions.”

Based on Gage’s projected compensation after 35 years and retirement at 62, he would receive $2,113,125 by age 85. If he lived to be 75, Gage would receive $1,194,375 — a difference of $918,750.

“That is almost a 44 percent exaggeration based on life expectancy, alone,” Gage said.

Why publish information?

Tobin said her group is publishing the information because it thinks the cost of pensions is leading governments toward economic collapse. She said the stop in Salina was the group’s third in the state.

The group is compiling pension data on public sector officials across the country and has visited nine states.

“We are building a database on our website where people will be able to search for the pensions of public employees,” Tobin said.

She said her group doesn’t want current government employees to give up their pensions but put more money into the system. She said new employees should be required to contribute to their pensions through a 401(k)-style plan, instead of a pension that’s a guaranteed amount.

Taxes increased for pensions

“Every tax increase is to keep the pension system alive,” McNeilly said. “We can say it is for all of these other purposes, but it is to keep the pension system alive, well and well-funded. It is to take more and more from taxpayers.”

Tobin said union leaders and politicians have created an atmosphere in which administrators of municipalities are receiving large pensions.

“Right now, the system is rigged so the taxpayers foot the bill and the rank-and-file are used as pawns by the union leaders and administrators that cut the deal with them,” McNeilly said. “The objective is to bring about true pension reform that eliminates any future unfunded liabilities.”

Gage said the city doesn’t recognize or work with any unions.

Kansas needs to open up

McNeilly said the group hopes to reveal to people that pensions in Kansas are open records, but only to a degree.

“According to the Sunshine Review, most of the states release the pension information with the names, but Kansas is not one of them,” Tobin said. “It releases the pension amounts, but they don’t have names. There is blatantly a lack of transparency in Kansas.”

Tobin and McNeilly said Kansas needs to make pension amounts more available to people upon request.

“Pensions are $2.8 billion of unfunded liabilities,” McNeilly said. “The average person can’t relate to that, but when you tell them their neighbor down the street is earning $60,000 to $80,000 without working and is only 55, and you are paying for the benefit, it speaks volumes.

“We hope people are outraged enough by this to contact their legislators and get this (direct pension system) changed,” McNeilly said.

Who are they?

Taxpayers United of America is a group that advocates for no tax increases.

Tobin is the daughter of Jim Tobin, founder of Taxpayers United of America; president and founder of the Free & Equal Elections Foundation; and is campaign manager for Dan O’Connor, a Democrat who is running for Congress in New York’s 12th District. She also ran as the Libertarian candidate for secretary of state of California in 2010.

Gage said he is glad the group took an interest in public sector salaries in Saline County, but said it needs to publish correct information about salaries and pensions.

“They may have a small group with a big name that represents factual representations,” Gage said. “They need to escape from their ideological fights and report information. They don’t need to use false information to prove an ideological point.”

— Reporter Chris Hunter can be reached at 822-1422 or by email at chunter@salina.com.