For years, state and local politicians have ignored a looming fiscal crisis; namely, rapidly exploding deficits to public-sector employee pensions. Unfortunately, ignoring the problem does not make it go away, and now politicians, public employees and unsuspecting taxpayers face a brutal reality.
According to a new report by the Pew Charitable Trusts, states face a collective pension funding shortfall of $1.4 trillion. To put that into perspective, that amounts to roughly three times the annual budgets of California, Texas, New York and Florida … combined.
States must now choose among unpleasant options: cut back on other government services like education, public safety and parks to redirect funds to public employee pensions; raise taxes (angering voters and slowing economic growth); or reducing lavish public employee benefits (angering powerful unions).
The painful process is already underway. States like Arizona, Oklahoma, West Virginia and Kentucky face or have faced teacher strikes if demands for massive pay increases — as much as 20% immediately — are not met. Oklahoma’s teachers have been striking for more than a week, and West Virginia’s returned only after securing a 5% pay raise, even as state leaders warned of budget cuts elsewhere, including Medicaid, to pay for the raises.
Politicians have played a shell game for years, making contractual promises to public labor unions that are impossible to meet, using sleight-of-hand accounting gimmicks to hide the truth, even as they negotiated ever larger pensions with the unions with no way to fund them, hoping to be retired when it blew up..
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DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
7 comments:
The politicians will do what they always do, raise taxes to pay for the government's golden benefits and pensions. Of course they will include the increases in omnibus bills that obscure where the money is actually being spent. Our government and its leaders are all corrupt.
As a retired state employee the public needs to be reminded that the Federal Government raids and depletes the Social Security funds for purposes other that Social Security. Maryland (particularly former Govs. O'Malley & Schaeffer) "borrowed" BILLIONS of dollars from the State Employees Retirement fund (think of Oriole Stadium) which have never been paid back.
Keep in mind that the typical State employee paid 7 1/2 % of their salary every payday to this fund.
Hahahaha what the government gives they can also take away! If I was one of those employees I would prepare for a significant cut!
All governments are corrupt and evil.
Don’t work for them.
They lie and commit fraud.
The state is not innocent. As 42,000 retirees over 65 will be learning in May, they are losing their prescription drug coverage at the on if 2018. Saving the state $30 million which is close to the amount budgeted for the opioid crisis.
The state is not innocent. As 42,000 retirees over 65 will be learning in May, they are losing their prescription drug coverage at the on if 2018. Saving the state $30 million which is close to the amount budgeted for the opioid crisis.
HAHAHA! I was approaches in 1975 to join a union and get all these promises.
I looked at the math, and thought it was a ponzi scheme at best, as the math didn't work out even though back then interest was at 6% or more. It still didn't make sense and I elected the private sector.
Look at me now, dorks! Told you so 45 years ago.
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