Posted on 09/12/2010 11:59:50 AM PDT by Libloather
Public pension debt looms as budget buster
By Rep. Kathy Chase
September 09, 2010 2:00 AM
Maine faces a deepening crisis in its public pension system, as burgeoning costs threaten to squeeze out other government programs and vastly complicate the process of putting together the next state budget.
The root of the problem is the "unfunded actuarial liability" (UAL) in the accounts that pay pensions to retired teachers and state workers. The $4.4 billion shortfall, which was announced in July, has set off alarm bells in the Statehouse. Budget experts are now pondering the impact of pension payment obligations that have soared in recent months and are scheduled to become even more unmanageable in the near future.
Considering the daunting magnitude of the problem, some sort of changes look inevitable. Bills already submitted for the next Legislature could affect the retirement income of the roughly 76,000 plan participants, including those already retired and those still active.
How did we get into such a predicament? Most of the blame goes to politics and irresponsible government. Throughout the 1970s and '80s and into the '90s, the unions representing teachers and state employees lobbied to enlarge the size of their pensions to compensate for salaries that were, at the time, relatively low. Their allies in the Legislature actually changed the laws to "enhance" the pension payouts, but then neglected to fully fund them.
**SNIP**
Teachers and state workers count on their retirement system, and as legislators we want to make sure it's there for them when they need it. But there is a limit to how much the state and the taxpayers can afford.
State Rep. Kathy Chase, R-Wells, is the ranking Republican on the Maine Legislature's Taxation Committee.
(Excerpt) Read more at seacoastonline.com ...
they may have to be happy with alot less. politicians have squandered the futures so dont expect help...
This country would be a lot better place if we just shot all the union members.
BOHICA!
They count on it, the rest of us work for it.
We need to do away with these unions and pensions for public employees. They are fiscal time bombs.
They just shut down much of their mental health services, likely due to lack of funds in the overall budget.
Jails won’t really be cheaper.
Easy to fix....Just like bankruptcy....
STOP the funding....Turn it into cash..
payout cash via a percentage of what each individual has put in.. (years could be part of that formula)
All participants now have a cash IRA just like everyone else...invest as they see fit
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.