Most of the states in this country are having financial trouble. Pensions and similar contractual problems are currently making it impossible for most to balance their budgets. Tax revenues are down, while spending cuts have not kept up with demand for services and outlays.
Liberal legislators keep handing out promises and largess as if prosperity still reigned. Schools are expensive and keep growing in cost. Public service and government=worker union pressures are destructive for officials seeking budget solutions.
Unionized employees often get 70% or more of their income as retirement each year, after only thirty years or so of work. Chicanery, legal or not, is also at work. Many government pensions are permitted to be ‘spiked’ upward with overtime pay and raises, before retirement.
All this translates into big financial needs. It takes $2 million in capital funds at 5% to get one $100,000 annual pension per worker per year. (Many get that amount.) And that 5% is not easily achieved without risk of capital loss.
Bankruptcy to break pension contracts is not an option for most states; maybe for cities and towns. But they will have to freeze obligations or change contracts.
After all, Uncle Sam has first dibs on taxpayers and most states already are taking some huge cuts.
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