A State-Run IRA? No Way!

By Sen. Toni Boucher

“The state should not be getting involved in personal financial decisions, especially since it has not managed its own fiscal house well.”
With that sentence, a recent Hartford Courant editorial summed up my feelings about a proposal by majority Democrats at the State Capitol to create a state-administered IRA plan for the private sector.

Yes, you read that correctly. A state government-run private sector retirement plan.

The proposal barely passed Apr. 30 in the State Senate on a 19-18 vote. It now heads to the governor’s desk for his signature.
This is a terrible idea for scores of reasons. Here are but a few:

1. Why impose further burdens on businesses that, in recent years under one-party rule in Hartford, have been saddled with an ever-expanding number of government mandated payments?

2. Connecticut is unable to manage its own pension fund, which is funded at only 42%, when the standard is 85%. Yet, majority Democrats in the Connecticut House and Senate want to get into the retirement business? Really?

3. A state-run IRA plan would compete directly with private sector companies, worsening our already precarious business environment, exacerbating our cratering state tax revenue, and leading to the loss of even more high wage jobs.

Senate Republicans and I proposed an alternative plan. Our proposal addressed the desire for more private sector workers to save for retirement. Our plan supported the private sector and instead of competing with Connecticut businesses. Imagine that!

Our Republican alternative plan is based on Washington State’s already proven plan. It creates an exchange through which private sector companies can offer retirement plans to employers. Participation is voluntary, and open to employers with fewer than 100 workers. Our Republican plan:

1. Creates a small business retirement plan marketplace

2. Promotes participation in low cost savings plans

3. Educates small employers on plan availability

4. Involves no mandates and no government bureaucrats

Our common sense proposal was rejected. So, state-run IRAs may soon be the law of the land here in Connecticut unless the Governor vetoes or changes it.

Here’s my point: The state’s goal should be to help grow private sector business. Instead, measures like this are passed which burden job creators even further. It’s exactly the wrong message!

And the Hartford Courant editorial board hammers home that point. “If we’ve learned anything from the current budget crisis,” the Courant writes, “it’s that state government needs to approach problems differently from how it has in the past — to become a force for facilitating positive change without resorting to the classic formula of imposing a mandate and setting up a system to administer it.”

Amen! Too bad that message isn’t being heard by majority Democrats in the Connecticut House and Senate.

What do you think? Contact me at [email protected] . You can also call the governor at 860 566-4840. Tell him to read the Hartford Courant before he signs House Bill 5591!