The Bobster
Senior News Editor since 2004
http://www.dailynews.com/Stories/0,1413,20...069054,00.html#
Paying for pensions
Government's largess to public employees comes at a steep price
In California, public employees make a pretty good living, but they enjoy a phenomenal retirement.
And guess who ends up paying for it?
The numbers are staggering, and they make for a telling tale about the blunders of the administration of Gov. Gray Davis -- blunders that will burden taxpayers for decades.
As it stands, thousands of public-sector retirees are guaranteed six-figure incomes for life plus lucrative
health benefits. That number will only climb as thousands more public employees earning six-figure incomes approach retirement with promises to receive annual pension payments worth as much as 80 to 90 perc
ent
of their final salary.
This isn't just money public emplo
yees have saved up in a retirement program that's earned interest all these many years. Most pension programs in California are at risk of going broke, and it's tax money alone that keeps them afloat.
The city of Los Angeles, for example, is spending $121 million on its pensioners this year -- a figure that's supposed to jump to $420 million in 2008-09. The county has likewise seen its pension contributions jump by 34 percent, from $1 billion in 2002-03 to $1.34 billion in 2004-05.
At a time when the city can't afford to put enough cops on the streets, when the county is forced to release inmates from jail early and shut down health clinics, these costs are severe. As pensions balloo
n, the cost of government spirals ever upward, and the benefits taxpayers receive in return gets ever more meager.
How did we get here?
The problem began in the late 1990s, during the
dot-
com boom, w
hen the state's politicians bought into the myth that their windfall would conti
nue forever. Feeling flush -- and pressured by the public-employee unions that contribute generously to their campaigns -- they happily doled out ever sweeter pension and benefits to the state's employees.
Employee contributions to pension funds were lowered. Retirement payments were boosted, retirement ages cut. Many of the state's cities and counties, beholden to the very same special interests, joined in.
Then the boom busted, and the stock market tanked. At the very time when pension programs had to start making higher payments, their revenues shrank. And so taxpayers were called to bail them out.
That's the way it always works. In Sacramento and in Los Angeles, public employee
pensions are considered "sacrosanct," while the contents of the public's pockets are considered free for the taking.
That must change.
No one denies that public
employee
s should be paid fa
irly for their service, but the current pension system affords them benefits unheard of to most of the hard-wor
king Californians who pay the bills. And the purpose of government shouldn't be to to enrich a lucky few, but to benefit all.
"Sacrosanct" or not, it's time for officials in Sacramento and in local governments to correct pension excesses, and start giving taxpayers a better return on their investment.
Paying for pensions
Government's largess to public employees comes at a steep price
In California, public employees make a pretty good living, but they enjoy a phenomenal retirement.
And guess who ends up paying for it?
The numbers are staggering, and they make for a telling tale about the blunders of the administration of Gov. Gray Davis -- blunders that will burden taxpayers for decades.
As it stands, thousands of public-sector retirees are guaranteed six-figure incomes for life plus lucrative
health benefits. That number will only climb as thousands more public employees earning six-figure incomes approach retirement with promises to receive annual pension payments worth as much as 80 to 90 perc
ent
of their final salary.
This isn't just money public emplo
yees have saved up in a retirement program that's earned interest all these many years. Most pension programs in California are at risk of going broke, and it's tax money alone that keeps them afloat.
The city of Los Angeles, for example, is spending $121 million on its pensioners this year -- a figure that's supposed to jump to $420 million in 2008-09. The county has likewise seen its pension contributions jump by 34 percent, from $1 billion in 2002-03 to $1.34 billion in 2004-05.
At a time when the city can't afford to put enough cops on the streets, when the county is forced to release inmates from jail early and shut down health clinics, these costs are severe. As pensions balloo
n, the cost of government spirals ever upward, and the benefits taxpayers receive in return gets ever more meager.
How did we get here?
The problem began in the late 1990s, during the
dot-
com boom, w
hen the state's politicians bought into the myth that their windfall would conti
nue forever. Feeling flush -- and pressured by the public-employee unions that contribute generously to their campaigns -- they happily doled out ever sweeter pension and benefits to the state's employees.
Employee contributions to pension funds were lowered. Retirement payments were boosted, retirement ages cut. Many of the state's cities and counties, beholden to the very same special interests, joined in.
Then the boom busted, and the stock market tanked. At the very time when pension programs had to start making higher payments, their revenues shrank. And so taxpayers were called to bail them out.
That's the way it always works. In Sacramento and in Los Angeles, public employee
pensions are considered "sacrosanct," while the contents of the public's pockets are considered free for the taking.
That must change.
No one denies that public
employee
s should be paid fa
irly for their service, but the current pension system affords them benefits unheard of to most of the hard-wor
king Californians who pay the bills. And the purpose of government shouldn't be to to enrich a lucky few, but to benefit all.
"Sacrosanct" or not, it's time for officials in Sacramento and in local governments to correct pension excesses, and start giving taxpayers a better return on their investment.