Oklahoma has seven pension plans for state employees, and six of them have their own boards, staff, offices, consultants and investment managers.
If they all were consolidated under a single administration, as is done in many other states, taxpayers would save about $15 million a year, state Treasurer Ken Miller said.
“It just makes sense,” he said. “It needs to happen. It’s politically tough, but the Legislature needs to make those tough calls, especially in tough budget years, and they did not do that.”
This is just one of a number of examples of governmental duplication in Oklahoma. It’s wasteful and expensive at a time when the state is hard-pressed to adequately fund core services like public safety, health, education and transportation, Miller and a senior state representative said in recent interviews. In many cases, intense pressure from lobbyists, special interest groups and an entrenched bureaucracy works against streamlining.
Another $10 million could be saved if all state agencies, officers, boards and commissions used the services of the Oklahoma attorney general’s office rather than hire their own attorneys, the treasurer said.
Attorney General Scott Pruitt said he has been encouraging state agencies to use his attorneys, who work for $75 to $85 an hour, compared with fees of up to $300 an hour in some cases for outside attorneys.
State Rep. David Dank, R-Oklahoma City, said he’s astounded by the wastefulness in public education, higher education and the county commissioner system.
“There are 515 school districts,” he said. “There are 231 county commissioner districts, each with its own road maintenance barn, road building equipment and crew. That’s absurd.”
There are three commissioners in every county, and 77 counties statewide. The prevalence of county seats might have made sense at the time of statehood when a slow horse and buggy was the dominant form of transportation, but it does not make sense now, Dank said.
“I don’t know if anybody has looked around recently, but we’ve got cars,” he said.
Dank gave another example of redundancy.
“We have 62 Career Tech campuses and 52 college campuses. If we keep it up, it won’t be long before a kid can walk to every school from kindergarten through college.”
Dank said some streamlining can occur on relatively minor matters, but big savings usually involve issues where there are powerful special interests exerting influence to maintain the status quo.
“How many times can you consolidate the Santa Claus commission?” he asked. “Until we get into the big things, the money things, then we can’t make any progress.”
Many legislators wilt under political pressure and aren’t willing to cut spending in areas sensitive to their constituents, Dank said, citing school district consolidation as one such issue.
“They think it’s too politically toxic; they don’t want to mess with it,” he said.
The state treasurer did compliment the Legislature on a pension issue dealt with this year.
“Lawmakers took an important step this session to modernize the state’s second-largest pension system — the Oklahoma Public Employees Retirement System – by establishing a 401(k)-style system for new workers,” Miller said.
“This reform will provide future state employees with a modern and portable retirement program.”
However, he qualified his praise.
“And while this move makes substantial progress to move away from an outdated and unaffordable pension system, left undone is addressing the Oklahoma Teachers Retirement System, whose $8 billion unfunded liability is the largest debt on the state’s balance sheet.
“The state should enact reform similar to what was done this session with OPERS for Oklahoma teachers.”
The powerful Oklahoma Education Association would fight such a move, said Linda Hampton, OEA president.
“At the Oklahoma Education Association we represent more than 35,000 educators across the state,” she said. “We believe moving educators to a defined contribution versus a defined benefit pension system would not save the state money.
“Instead, this move has been proven to send many educators, upon retirement, into poverty. In the end, this would cost the state more money to support the needs of poverty stricken education families. It is sad that Oklahoma is ranked 49th in the nation in what we pay our teachers. Also, we are suffering from a severe teacher shortage which will worsen if the retirement system is changed.”
Did you know?
Proposals for saving taxpayers money:
•Oklahoma spends $80 million to $100 million each year to administer pensions for state employees.
•Combining administration and management of these systems would save $15 million a year, according to a report by New England Pension Consultants.
•A bill to unify administration of the two largest state pension systems, public employees and teachers, and save $11.7 million a year did not get a hearing in this year's legislative session.
Legal services consolidation
•Consolidating all state legal services under the attorney general's office would save $10 million.
•A bill to do this was introduced in 2010 but was not enacted.