Arizona State Representative Kirk Adams has highlighted the need for pension reform. A lawmaker and small business owner from Mesa, Adams is also the Speaker of the Arizona House ofRepresentatives. Adams made headlines when he recently announced that he would opt-out of his state-provided pension plan.
Arizona is in the midst of a major fiscal crisis. By oneestimate, Arizona must close a $1 billion budget hole. The reason for this is because the state simply cannot afford many of the programs and items in its budget.Additionally, Arizona has very generousretirement plans for state employees. For example, the state’s Elected Officials RetirementPlan, although it is relatively small, is very generous to its beneficiariesand its cost is growing. According to the Arizona Republic, “Of 500 elected officials who retired since2000, at least 43 of them are earning more in retirement than from theirsalaries while in office. The plan is increasingly costly to taxpayers, risingfrom $4.1 million in 2000 to $17.5 million now.” Clearly, something has to bedone to bring the costs of government under control.
Adams wants to dosomething about those costs. To eliminate any conflict of interest and to setan example for others to folow, he has voluntarily opted-out of the Elected Officials RetirementPlan and called for reforms to the state’s pension plans. By doing so, Adams is highlighting the need for reform andproviding the leadership necessary to make changes. Modifying pension plans arenotoriously difficult because current beneficiaries typically don’t want tolose their benefits in the name of long-term cost savings. But Adams andArizona have the potential to take the lead on pension reforms thissession, thereby setting an example for other states who must bring their costsof government under control.
What comes afterAdams’ action is anyone’s guess, but we will certainly keep watching him and hopingthat he follows through on his calls for pension reform. In themeantime, Adams deserves this Profile in Taxpayer Advocacy.