Governments borrowing heavily to cover growing pension shortfalls

modbee ^ | 10-16-04

[LouAvul]

Local governments in California are borrowing money this year at a rate unmatched in the past decade to pay for growing deficits in their pension funds, according to an Associated Press analysis.

So far in 2004, local governments with pensions outside the giant California Public Employees Retirement System have issued nearly $1.7 billion in bonds just to pay for existing pension shortfalls. With three months left in 2004, that's 50 percent higher than any year in the last decade, according to data from the California Debt and Investment Advisory Commission.

The stock market's poor performance, shrinking tax revenues and the creeping expansion of employee benefits all contribute to the swelling deficits in public pensions. But whatever the cause, these debt numbers suggest California governments aren't putting enough away for their employees' retirement.

Increasingly, local governments are relying on pension obligation bonds to pay the difference between pension assets and payouts. Wall Street is happy to help, especially since courts have held that pension bonds can be issued without voter approval.

Ultimately, California's taxpayers will pick up the tab for the shortfalls and for sweetened benefits as they pay off the bonds.

"It's a ticking time bomb," said Orange County Treasurer John Moorlach, "and everybody keeps walking around like there's no problem."

[LouAvul]

shrinking tax revenues

(We're running business out of the state)

and the creeping expansion of employee benefits

(The imbeciles in Sacramento keep pushing their socialistic agenda.)

Ultimately, California's taxpayers will pick up the tab for the shortfalls and for sweetened benefits as they pay off the bonds.

And that's what's gonna happen.

[meenie]

The sad part of the story is that California is showing symptom of the disease that the entire nation faces if the trend continues. Even compassionate conservatives are more prone to thinking a little socialism is alright. You either have freedom of the market and individual responsibility or you don't. We have too many people and businesses hoping to suck the government teat. There have been too many nations fail after experimenting with socialism, but new suckers are born to renew the faith.

[cynicom]

Feds have a 7 trillion pound gorilla living next door. One of these days.........

[Righter-than-Rush]

Why the hell did you draw from pension funds anyway? You gambled! Idiots! Your employees should sue you for DOUBLE their pensions!