Most of this country’s states are having financial trouble. Pension and other poorly undertaken contracts are making it impossible for most to balance their budgets. Tax revenues are down from past levels, while spending cuts have not kept up with demand for state services and outlays.
Yet, liberal legislators keep handing out promises and largess as if prosperity still reigned. School costs keep growing. Public service and government=worker union pressures are destructive for officials seeking budget solutions.
Unionized employees often get 70% or more of their income for 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.
Fact: It takes $1 million in capital funds at 5% to get one $50,000 annual pension per worker per year. And that 5% is not being achieved these days.
Bankruptcy to break pension contracts is not an option for states, without federal law changes, but maybe for cities and towns.
There will have to be some freeze in obligations or change in contracts for individual solutions.
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