States’ Finances

               

Most of this country’s states have financial trouble. Pension and other poorly undertaken contracts are making it impossible for most to balance their budgets. Any spending cuts have not kept up with demand for state services and outlays.

                       

Yet, legislators keep handing out promises and largess. 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 less of work.

                       

Chicanery, legal or not, is also rampant. 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 retiree $50,000 annual pension each year. And that 5% is not being easily 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 change in contracts for individual solutions.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)