PUBLIC-SECTOR UNIONS BANKRUPTING AMERICA
April 26, 2010
Usually it takes a national government to spend itself into a debt measured in the trillions. Yet it comes as little surprise that the same profligacy that pervades the corridors of federal power infects this country's 87,000 state, county and municipal governments and school districts. By 2013, the amount of retirement money promised to employees of these public entities will exceed cash on hand by more than a trillion dollars, says the Washington Times.
That's according to the Center for Retirement Research at Boston College, which earlier this month released a troubling analysis of 126 state and local pension plans:
- The center's researchers found in the wake of the stock market collapse that measures of pension program solvency hit a 15-year low with no signs of improvement on the horizon.
- This means taxpayers will be left picking up the tab.
The reason pension plans are headed toward financial disaster is simple, says the Times:
- Ever-expanding public-sector unions have flexed their political muscle and larded up with lavish benefits to be paid out decades from now.
- In a properly run, private-sector business, future retirement benefits are paid for using present-day contributions.
- This is not the case when lawmakers have the power to boost public-employee benefit packages while using accounting gimmicks to conceal and pass on the debt to future generations.
California's public-employee retirement system stands in the most perilous condition, facing a half-trillion dollars in unfunded liabilities, says the Times:
- That's not surprising when you consider a California highway patrol officer can retire at age 50 and collect up to 90 percent of his salary for the rest of his life.
- According to the agency's website, a typical officer's pay will reach $109,147 after just five years on duty -- an amount that can rise significantly with overtime benefits.
- That means a fit and healthy 50-year-old "retiree" who began work at age 20 would receive $98,232 a year from taxpayers for the rest of his life, and nothing prevents him from taking another government job to collect two paychecks; this form of double-dipping is rampant.
Source: Editorial, "Public-sector unions bankrupting America; State and local governments face looming pension crisis," Washington Times, April 23, 2010.
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