Aug 13 2013

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Reform by Referendum is a Double-Edged Sword

City obscureOur fine City of Cincinnati, like many hamlets throughout the country has a steadily growing unfunded pension liability problem.  City Council has a fiduciary responsibility to oversee and provide adequate annual contributions to ensure long-term pension solvency.  Unfortunately, like Detroit, and other cities with pandering officials, wish list projects get financial priority over not only pension funding, but public safety as well.  We’ve seen the results; citizens move to other cities and counties, accelerating the demise.

As a way to stem the looming shortfall, a group of Ohioans decided to tackle the pension problem by circulating petitions for voter signatures and placing a charter amendment on the ballot for Cincinnati voters.  According to Local12 news,  “The amendment would end pensions for new city employees and implement retirement accounts similar to 401 (k)’s. Cost of living increases for current retirees would be capped at 3% annually and an independent audit of the pension would be conducted annually. The amendment would require city officials to find funds to pay for future benefits.”

City workers will make defined contributions and see that money grow in their own account until retirement.  Fiscally responsible elected officials and candidates look at this ballot issue with mixed feelings based on the timing.  National union leaders hold a stake in the status quo and they will dump big money into media to keep this initiative from passing.  This means an off-year election will become a media battle to turn out voters using false narratives about destroying the “sacred” promises made to hardworking employees, not mentioning that retirees will be hurt far more by funding shortfalls.  The initiative has qualified with adequate signatures for the November 2013 ballot, so the battle begins.

It is not clear how the public will perceive the issue, it is likely that turnout will be heavier due to media dollars spent this fall.  Fortunately, this initiative will not affect police and fire pensions which played a key role in the wholesale removal of responsible council members in 2011, when Ohio ballot issue 2 brought out a tsunami of Democrat city voters.

All that being said, a voter referendum may be the best way to deal with a responsibility that Cincinnati City Council has abdicated, and in the long run, provide real security for retirees that will “own” their retirement money.
The proper time for this referendum would be during a spring primary election, when only the most concerned voters for and against an issue visit the polls.  It is a shame Hamilton County must endure another Election Day where 30 second commercials replace meaningful discussion and facts.

More generally, the petition referendum, by it’s nature is a replacement of representative government with direct majority rule making and should be used sparingly.  If we decide legislators are not capable of discharging their duties, the answer is not frequent ballot initiatives. If we go that route, civil society will lose.

Secondly, for all its faults, bad legislators are held accountable for their behavior through elections, whereas any group or individual with some bucks in their pocket can gather signatures and place their desired issue on the ballot.
This opens the door to another flavor of irresponsible activity that may be worse. Readers may recall this recent video where a guy gathers signatures for a fake petition that seeks to repeal the “Bill of Rights.”  Nervous laugh.  In a direct democracy, anything is possible!

Finally, citizens must consider the agenda of every group or individual that starts a ballot referendum.  Ohio has enjoyed a few worthy initiatives that produced great results – “End Ohio’s Estate Tax” and “Ohio Health Care Freedom Amendment” come to mind, but this is not always the case.  Where is the accountability for those that begin a ballot initiative?  Those that complain about groups putting big money into elections should consider the damage that can be done with smaller sums of money by people looking to legislate through voter referendum.

Every tool must be used with care. The ability to bypass city or state legislators can be a very useful tool, but we don’t trim the hedges with a lawnmower and we should not toss aside representative government for sound bite democracy.

With liberty comes responsibility. As citizens we must demand responsibility of our elected officials and highlight those individuals that are not representing the citizens or retired city employees.


About the author

Ed Bell

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