Why employee pensions aren't bankrupting states. WASHINGTON — From state legislatures to Congress to tea party rallies, a vocal backlash is rising against what are perceived as too-generous retirement benefits for state and local government workers. However, that widespread perception doesn't match reality. A close look at state and local pension plans across the nation, and a comparison of them to those in the private sector, reveals a more complicated story. However, the short answer is that there's simply no evidence that state pensions are the current burden to public finances that their critics claim. Pension contributions from state and local employers aren't blowing up budgets. They amount to just 2.9 percent of state spending, on average, according to the National Association of State Retirement Administrators.
Though there's no direct comparison, state and local pension contributions approximate the burden shouldered by private companies. Nor are state and local government pension funds broke. BLS data on unionization. Wisconsin May Take an Ax to State Workers’ Benefits and Their Unions. The proposal by Mr. Walker, a Republican who was elected in November after pledging that he would get public workers’ compensation “into line” with everyone else’s, is expected to receive support next week in the State Legislature, where Republicans also won control of both chambers in the fall.
The prospect left union leaders, state and local employees and some Democrats stunned over the plan’s scope and what it might signal for public-sector unions in the state. Union leaders began planning rallies in Madison and contacting lawmakers, pressing them to reject the idea. Mr. “I’m just trying to balance my budget,” Mr. State leaders across the country have talked about solving budget woes with actions that in other climates might have been politically impossible: cutting the salaries and pensions of government workers and limiting the power of labor unions.
Among key provisions of Mr. Mr. But Mr. Wisconsin officials say Mr. Mayors See No End to Hard Choices for Cities. State Bankruptcy Option Is Sought, Quietly. NJ Public Pension Slugfest Reporting Omits 15 Years of Governors Stealing From Workers. If you live in the world according to the mainstream media, the row between state executives and unions is all about (by implication) greedy unions trying to preserve their perquisites when budget “realities” demand that they suffer.
Consider this excerpt from a recent article New York Times article about the fight in New Jersey: Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy. Um, the “wounded economy” trashed the state budget? Funny how the article fails to point fingers at the real perp, which is the global financial crisis, brought to you by your friendly TBTF banks. Andrew Haldane, Executive Director of Financial Stability for the Bank of England estimated that the costs of the financial crisis was 1 to 5 times global GDP. The shell game started in 1995 with Christine Todd Whitman. Public Employee Unions Face Rising Public Anger. In Michigan, Hamtramck Pleads for a Bankruptcy Option. Fabrizio Costantini for The New York Times Vacant stores in Hamtramck, Mich. This time they slashed money for boarding up abandoned houses — aside from circumstances like vagrants or obvious rats, said William J.
Cooper, the city manager. They shrank money for trimming trees and cutting grass on hundreds of lots that have been left to the city. “We can make it until March 1 — maybe,” Mr. “The state is concerned that if they say yes to one, if that door is opened, they’ll have 30 more cities right behind us,” Mr. Bankruptcy, increasingly common among corporations and individuals, remains rare for municipalities. Yet with anemic property tax revenues and forecasts of more dire financial times ahead, some experts and elected leaders fear that more localities may have to at least consider bankruptcy. Only about 600 cities, counties, towns and special taxation districts have filed for bankruptcy (known as Chapter 9 for these sorts of entities) since 1937, said James E. Pensions Push Property Taxes Higher.
Chapter 9 Weighed in Pension Woes. Alabama Town’s Failed Pension Is Warning to Cities and States. New York Confronts $200 Billion Bill for Retiree Health. Pension Gaps Loom Larger.