Private Lobbyists and Public Pensions Don’t Mix

Government officials mismanaging public funds is nothing new. But giving public pensions to private lobbyists is a new low.

A recent Associated Press report uncovered that at least 20 states supply private lobbyists with public pensions and sometimes health care benefits. In some cases, the states have provided this absurd benefit for decades. Worse, but not surprising, much of the activity these lobbyists carry out conflicts with taxpayer interests.

In today’s Milwaukee-Wisconsin Journal Sentinel, I note that government has a long history of inappropriately spending public funds:

For example, in the 19th century many states went on a spending binge by investing heavily in private railroads, canals and other infrastructure projects that ultimately went bankrupt and left taxpayers stuck with the bill. States defaulted on their debt obligations 17 times. Municipalities were also in the same spending game.

But at one point in U.S. history, state elected officials realized the error in their ways:

Finally, state lawmakers sought options to protect taxpayers from the temptation of legislators to give away taxpayer funds to private interests. Their solution, in at least 45 states, was to enact a constitutional provision known as the “Gift Clause,” which forbids public subsidies to private entities.

Fortunately, state constitutional provisions against corporate welfare are still on the books. And the Goldwater Institute, a free-market think tank in Arizona, has had success in enforcing the letter of its state’s Gift Clause. Arizona’s Gift Clause states that no state or local government agency “shall make any donation or grant, by subsidy or otherwise, to any individual, association or corporation.”

Arizona courts have ruled:

To determine whether public funds aiding private interests violate the Arizona Gift Clause, Arizona courts have come up with a two-part analysis that must be satisfied: (1) The expenditures of public funds must promote a public purpose. (2) The public entity must receive proportionate, quantifiable and direct benefit for the aid given.

Obviously, granting public pensions to lobbyists fails the Gift Clause test. Especially when these individuals never perform government duties and serve private interests.

As I conclude in my op-ed, “The good news is that nearly all 20 states that offer public pensions to private entities have a Gift Clause in their constitution. It is time to put them to use for the protection of the taxpayer.”