The audacity of the city leaders in Clarksdale to give themselves unprecedentedly large raises has received attention across Mississippi.
After receiving a 42% pay hike, that city’s mayor, Chuck Espy, has a higher salary than Gov. Tate Reeves. The 75% jump for the city’s commissioners makes them reportedly the highest-paid part-time elected officials in the state.
The numbers are gawky: a $36,000 raise for the mayor, bringing his salary to $122,422 a year; a $20,000 raise for the commissioners, bringing their pay to $46,650.
People in that community are incensed, saying that the raises are outrageous, given the town’s size and its declining tax base. They also don’t like the way the elected officials enacted the hefty increases, attaching them to pay hikes for all other city employees that averaged 7%.
One aspect of this fiasco has implications beyond Clarksdale. It illustrates one of the major problems with the state Public Employees’ Retirement System and how it is designed to pay out maximum benefits without worrying about how much taxpayers will be hit up to pay for them.
When the public outrage in Clarksdale produced an effort this month to rescind the raises, two commissioners — Ed Seals and Willie Turner Jr. — and Espy stood in the way. It’s unclear how much, if any, those two commissioners will benefit in their retirement pay from their large salary hike. It all depends on what Seals earned as a public school educator and Turner as a fireman and now county jailer.
But Espy will come out nicely, according to the Clarion Ledger’s reporting.
At the end of this term, Espy, who was a legislator before he became mayor, will be eligible for full state retirement benefits. Those benefits are based on two things: length of service and the highest four years of pay. For Espy, his highest four will be the salary he just approved for himself. The Jackson newspaper calculated the raises will push Espy’s publicly financed retirement benefit to more than $5,000 a month.
So, not only are these raises padding Espy’s pay beyond what a mayor in a city of 15,000 people should earn, it pads his income for the rest of his life.
Espy is a highly visible example of what’s wrong with a retirement system that bases the benefit on such a short amount of earnings time, but he’s by far not alone. Some former state lawmakers have been able to leave the Capitol and land cushy government jobs for a few years that up their retirement benefits. There are also stories about public employees manipulating the system by deferring compensation so as to let it pile up in some years more than others.
Consider by comparison the Social Security system. It calculates retirees’ benefits by their top 35 years of earnings, adjusted for inflation. That produces a much truer picture of a worker’s average earnings — and how much they paid into the system — than does PERS.
This would be an easy fix. Calculate the retirement benefit in PERS on not the highest four years, but the highest 25, adjusted for inflation. For employees who retire with less than 25 years in the system, those years they were not contributing into PERS would bring down their average.
Such a change would be fair and sensible, like a lot of other proposed reforms to the PERS system that have been ignored by the majority of Mississippi legislators.
That’s why PERS is in trouble and why it’s been projected that taxpayers within 20 years will have to kick in between 33% and 40% of a public employee’s salary to keep the retirement system afloat.
