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Issue Position: Government Reform

Issue Position

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Government Reform: State Employee Benefits

Kay's Answer: You've touched on a serious problem facing the Great State, and it's growing more critical with each year.

In 1999, payments by the state for health insurance and pensions for teachers and other government employees totaled $667 million. Today, they cost $2.3 billion. By this time next year, that number will jump to $2.7 billion, and it's going to be extremely hard for the state to pay it because of projections for decreased tax revenues.

Officials in both parties agree that the state's increasing costs for benefits associated with PEEHIP (Public Education Employee Health Insurance Program) and with SEIB (State Employees' Insurance Board) are unsustainable. Governor Riley and Dr. David Bronner have asked the legislature to consider reforms in the past to address the problems.

So, the question is: How do we do this?

As the Montgomery Advertiser pointed out in July, there are basically three ways to meet ever-increasing costs:

1) Better investment returns for pension funds;
2) Higher payments from employees; and/or,
3) Higher payments from Alabama taxpayers.

We have some smart people making good investment returns for the state. But the market alone cannot be counted on to produce all of what we need.

I agree with proposals aimed at keeping the costs of health insurance premiums and pensions down for our government workers and retirees. SEIB and PEEHIP insurance rates should be pegged to any cost of living adjustments given by the Legislature. But, in the end, employee rates must be raised to a reasonable level so that taxpayers are not responsible for footing the bill of nearly all the increased costs.

We must also close the loophole which allows two active employees who are married to each other to pay premium rates far below what families pay in the private sector.

I am not making scapegoats out of dedicated state employees who work hard and serve our state so well. But the financial reality is a cold, hard reality. Until somebody figures out how to grow money on trees, we simply cannot afford to sit back and do nothing while this problem continues to get worse. If we don't act now, it will soon produce an annual tab that will be impossible to pay.

Unfortunately, the legislature did not heed Governor Riley when he announced a package of retirement and health insurance reforms in 2004. I hope to have more sensible heads prevail when I sit down with legislative leaders as governor in 2011. I believe we can put our heads together to fashion a solution in a cooperative manner that doesn't endanger the financial health of this state in the future.

The Benefit to You: State employees would have greater economic security for their futures, while citizens wouldn't be squeezed for higher taxes which create a greater burden on their family's budget.

Government Reform Pt. 2: Lowering Costs

Kay's Answer: There are many different approaches I would favor.

First, I'm a big fan of bringing new, innovative technologies to Montgomery to make government operate more inexpensively and more efficiently. I know it can be done because I have accomplished it in the State Treasurer's office. And, I will make it work for the rest of state government, too!

Government doesn't have to be slow-moving if the technology exists to serve the public more effectively. One of the easiest ways to do this is by using technology to replace retiring employees. When somebody in a government office retires or leaves, our first response should not necessarily be to replace them with someone else. Instead, each office should determine whether:

(1) the position needs to be a full-time replacement;
(2) the job could be split among workers already in the office; or
(3) the position could be replaced with a technological solution.

If a technological solution is a good solution, employees could be cross-trained to use it, thereby reducing costs.

Second, we need to make greater use of the competitive bid process. I implemented this in greater scale with our daily transactions and the result has been annual savings of hundreds of thousands of dollars to you the taxpayer.

Third, we need to assess where antiquated or duplicative state programs exist and either upgrade them for efficiency or eliminate them altogether.

I wouldn't limit myself to just these. There are also successful approaches used by other governors in other states and effective methods devised by private sector institutions that I would consider as well.

The Benefit to You: By pairing skilled workers with effective technology, implementing more competitive bids for state services and equipment and getting rid of out-of-date or useless state programs, state government can operate more quickly and less expensively. This delivers better government service for your tax buck.

Government Reform Pt. 3: Banning PAC-to-PAC Transfers

Kay's Answer: A good first step would be banning "PAC-to-PAC transfers."

PACs--also known as "Political Action Committees"--were originally designed to help small businesses and other interest groups combine their contributions to help a candidate. Over time, though, they have become a way for politicians to evade ethics laws that prohibit large campaign contributions from one dominant source, often a special interest group.

To dodge the $500 limit on giving to a candidate, corporations and special interest groups can give to as many PACs as they wish. These PACs can then secretly pass money around among themselves before it arrives at its intended destination. Hundreds of PACs exist in Alabama, and they've moved hundreds of thousands of dollars in and around Montgomery.

Since 2006, several efforts have been made by both Republicans and Democrats to ban PAC-to-PAC transfers in Alabama, but all of them have died in the state Senate.

The people of Alabama overwhelmingly want to see the PAC system changed. A 2008 survey by Dr. Randolph Horn at Samford University found that 4 out of 5 Alabamians want to see the PAC-to-PAC transfers ended.

If we ever hope to bring transparency and accountability to our legislature, PAC-to-PAC transfers must be stopped.

The Benefit to You: PAC-to-PAC transfers put special interest groups above the people of Alabama. This practice must be banned once and for all.


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