Posted on 09/21/2005 9:43:53 AM PDT by NormsRevenge
One financial expert describes it as one of the most stunning transfers of wealth in human history, from the pockets of taxpayers to the pockets of government employees. What will it take to awaken the victims? What's happening is that extravagant increases in pensions and other compensation of state and local government employees threaten to cause a wave of bankruptcies, tax increases and cutbacks in services.
An analysis by the L.A. Daily News this week showed that California's largest public agencies face an increase of $108 billion in pension costs compared to just three years ago. According to the Legislative Analyst's Office, that's a tenfold increase.
Steven B. Frates, a senior fellow at the Rose Institute of State and Local Government at Claremont McKenna College, says we are just beginning to see the effects of this giveaway. He says Californians will suffer greatly as a consequence; schools, roads, bridges, sewers, water systems and similar improvements will have to be curtailed because more money will get channeled into the huge retirement obligations.
The damage is close at hand, because a third of California and L.A. County employees are expected to retire within the next five years. (The percentage of federal employees is even higher, although their pension benefits are not nearly so rich.)
The first horror story is San Diego, which has not yet figured out a way to avoid a bankruptcy caused by spiked public pensions that created a $1.4 billion unfunded liability. Even after those problems surfaced, Orange County supervisors jacked up pension benefits well beyond what the county could reasonably expect to handle in future years.
L.A. County alone has an unfunded liability of $16 billion; the city of L.A. $3.2 billion; L.A. Unified $6.9 billion; and CalPERS, the state public employee retirement system, $22.3 billion. Nationwide, according to the Wilshire Associates investment consulting firm, unfunded state pension liabilities are $366 billion, which is double the estimate of just the year before.
In California, it is unfair to lump all pension problems together, because teachers, for example, have more modest pensions than state and local government employees, and also they pay eight times as much of the pension costs as Long Beach city employees. Also, L.A. city fire and police pension programs actually show a surplus, and L.A. County has done a better job than some in holding down pension costs.
Should taxpayers despair about what's being done to them? No. There are three ways to improve matters, at least for the future: Make government employees pay for the fattened pensions; implement two-tiered plans, so that future hires have smaller pensions; and start replacing government workers with contract employees who get salaries and pensions more like those of taxpayers.
And when should voters wake up to what's going on? Now would be a good time.
Public employee unions should be illegal. These pension will destroy these budgets. Maybe the bankrupt pension escape module (like the airlines) will work...
This is the next big financial scandal. The public unions running off with the public's money. Inflated pensions versus the private sector and govt guarantees for the total amount..that is sweet if you can get it. Have your kid go to work for state and local govt. No work..good pension.
I fearlessly predict that within 15 years a younger cohort of Americans will replace the Golden pensions of "public servants" with lead pensions.
Unlikely that states should be allowed to go bankrupt. They might have to sell their real estate or other assets, but they can and should pay the debts they incur. Otherwise, I have to agree with you that public employee unions ought to be illegal as against public policy.
I see you are in favor of the initiative to start a California Border Police agency. Under your scheme, would they be eligible for a pension?
Defined benefit plans for government employees should be outlawed (and private industry would do well to abandon them as well, and has already made good progress in that direction).
My scheme? get lost. lol
I would build a wall too, a big one, btw. ;-)
Welcome to FR as well..
I see we are drawing a lot of new members all of a sudden as the special election approaches.
What state are you from? Don't be shy.
Thanks.
and the answer is why shouldn't they, being as everyone else gets one these days , it seems.
The bottom line is that many many public sector employees get paid way more than private sector people, PLUS get a pension plan that most people cannot even fathom.
It is simply disgusting to hear public employees complain about their pay consdering the fact that they are, not always, overpaid, underworked, and make a killing off the taxpayer.
"I fearlessly predict that within 15 years a younger cohort of Americans will replace the Golden pensions of "public servants" with lead pensions."
Good call. But I don't think it will take that long, and I also don't think it will necessarily be younger Americans. Financial realities will rear their ugly heads, and no matter WHAT a contract says, if the money ain't there....
It's happened in many a private sector industry: we know you were promised this amount, but we have to cut it back to this amount. three years later, we have to cut it again. two years after that....
the nice thing about it is, when the retirees bitch and moan, they won't get any sympathy from we "civilians."
With respect, I disagree with your assertion. Most public sector folks do not make the type of money you think they do. The average CalPers pension is less than $30,000. After federal and state taxes (California) there is not much left! Cheers!
My uncle is a retired teacher from Bronxville Schools in NY who gets 77k per year pension, plus health, etc etc.
Most people do not make that while working, let alone as a pension.
Firemen in Yonkers, NY get 75% pay for life if injured on the job. most people are lucky if they are smart enough to get disability insurance.
School teachers in NY make a private sector salary while working less than a full year and can retire after 20 years with a lavish pension and health care.
We can not afford it anymore. We are going broke as a society because too many people are on the dole.
Where I live, Yonkers, Cops and firemen clean up like no tommorow. Relatively low crime and fires, yet huge pay and pension and overtime. Most make more than most private sector people.
Your uncle is very fortunate. Most teachers in California (the subject NormsRevenge's post) don't make $77,000 after working 30 years. Their pension in California would be around $40,000. Yes, firemen in Yonkers may get 75% if injured, but I have known firemen who are now quadriplegic, who do get 75%, but can't walk. What price would you pay for the services of a man or woman, who pulls you from a fire? Don't get me wrong, there is much waste in local governments. But the public demands services. In my community, we would get complaints if after a 911 call, the police/fire were not at the scene within 3 minutes. Choices have to be made.Less service for some unquantifiable savings.
You're welcome and feel free to jump in, I hear it may help keep the arteries clog FRee if ya over-indulge here at FR.
Thanks for your years of service in the liberally infested Bay ARea, btw. Glad I never ran into ya on the job. lol. My uncle was in the Berkeley PD in the 50s., passed away quite some time back.
I am not railing per se but I'll take that for what it is worth. :)
I post a lot of threads and occasionally will opine contrary or controversial opinion to draw some comments from folks in the know and trolls too that allow me and others to be set straight and/or catch a lib troll or two occasionally. :)
I understand the comment about drawing good folks and agree it's better to pay a premium to keep them versus hire any Joe off the street. Social Security is a whole other issue which smells worse every year.
CalPERS is truly a Big Dog so to speak, too bad it has become a political entity of late and allowed to serve as a platform for purposes other than it was originally intended.
I am going to have to mod the title a bit.
Good points. Thanks.
It really is amazing. If America hits hard times the new royalty will be retired civil servants. Their pensions are wayyyyyy out of line compared to the private sector.
You'll know we are in a depression if these rip-off artists actually have their pensions trimmed by various gubbermint entities. There pensions are inviolable with iron clad legal language. They are untouchable except a depression would probably result in benefits cuts
The public pension system shoudl do what private companies with overpromised underfunded pensions do: DEFAULT, give the peole 50cents on the dollar which is what they should have gotten in the first place if the public unions didn't indimidate the pols.
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