Gov. Nikki Haley says she plans to propose cutting state employees' health care and retirement benefits as a way to start addressing what she says is $14 billion in unfunded retirement benefits. She made the announcement during a town hall meeting Thursday night in Lexington.
"We've got retirees that we know have been promised things and so we always want to make sure that we protect them as best as we can. But current government employees, we're going to have to look at what we can do," she said.
But Joe Benton, executive director of the SC State Employees Association, says there is no $14 billion unfunded liability in the retirement system, so there's no need to cut employees' benefits. He says the system has $22 billion on hand and is taking in $4 billion a year while paying out $2 billion.
"We haven't had a raise in four years and yet it costs us 8 to 10 or 20 percent more to live now. So we've taken the cuts and we continue to pay 27 percent of what it costs for our health insurance and 50 percent for our payment, for our retirement, so I don't know what more we can give," he says.
South Carolina Education Association president Jackie Hicks says cutting health care and retirement benefits for new employees would make it even harder to recruit good teachers into the state, especially when their starting pay would also be low.
"If I have new teachers coming into this state to teach, I want the best and the brightest and you get those by good salaries," she says. "And so we need to have that and we need to have good benefits."
Benton and Hicks say the move could lead to state employee protests at the South Carolina Statehouse like the ones that have been happening in Wisconsin. But Benton points out that state employees in Wisconsin pay nothing for their health care and retirement benefits, while South Carolina state employees do.
State Sen. Joel Lourie, D-Columbia, says he was surprised by the governor's proposal and doesn't think it's a good idea.
"The lion's share of state employees work very hard for probably below-average pay, in many cases, and one of the things that attracts them to be a public servant, to work for state government, is the retirement program and the benefit package," he says. "I would be very leery of making any major changes."
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