Sometimes all it takes to understand one of Vermont’s most perplexing economic problems is a room full of drums.
It’s not every day you see two gray-haired economic experts like Art Woolf and David Coates jam on bongo drums (none too rhythmically, it must be said). But that’s what’s happening when Charlie Papillo, host of the acclaimed video series Travels with Charlie, walks into the recording studio at Soli Music in Essex Junction for the opening scene of the series’ 12th segment.
Charlie: “Hey, what’s going on?”
Art Woolf and Dave Coates (in unison): “We’re the Odditers!”
On the subject of State of Vermont pensions, one can hardly blame Dave Coates for feeling like the odd man out. For more than a decade, the retired partner of KPMG accounting firm and esteemed economic advisor to several Vermont governors has been telling the Legislature, the media, and anyone who will listen that the State of Vermont employee, municipal worker, and teacher pension funds are in trouble. Vermonters, living longer, rely more on their pensions. Listeners nod their heads. Very little changes.
That’s why Charlie chose a room full of drums for this segment’s scene.
Charlie: “Dave, you keeping talking about that pension fund. You keep beating that drum (rim shot), and no-one’s listening!”
Dave: “I’ll start with what will knock everybody out. We as a state owe $4.5 billion in unfunded liability relative to the pension retiree health care benefits fund. That’s an increase of about $2 billion in the last 10 years. So we’re going in the wrong direction – quickly.”
State economist and pundit Art Woolf’s comments show he’s more than just eye candy.
Art: “The problem wouldn’t be as bad as it is if we had more people working, more people earning income, because that would mean more people paying into the system. The number of people working jobs in the state is either flat, or down. There’s going to be less money available to pay for these costs.”
Charlie: “If we continue to go in this direction, we’re going to be off the charts soon.”
Dave: “I think there is a lot of pressure in Montpelier. The pressure comes from the unions. The unions don’t want to change the plan. Its very good for its members. Incidentally the union doesn’t even have that plan for its executive members. And why? Because it’s too expensive.”
Charlie and Dave acknowledge that the Legislature has been putting money into the pension fund – but it’s like pouring water into a boat with holes in the bottom.
Dave: “These amounts that they’re allocating – what is $20 million based on 2.1 billion dollars?”
Art: “Life expectancy is going to increase. There is a 50% chance that a baby girl born today will live to be 100.”
Both men predict Vermont workers will have to work longer to earn enough for longer retirement. The solution – amending the pension law to require more from workers – isn’t magic, it just needs the Legislature to approve it, and the governor to sign it, Art said.
You can see every scene and hear every drum roll by clicking on Travels With Charlie, produced by True North Media. Asher Crispe of Danby is the director, and Brad Ferland of St. Albans Town is producer.