Skip to comments.Rhode Island Is 'Being Crushed' By Pension Debt, Treasurer Urges Major Overhaul
Posted on 05/24/2011 5:32:25 PM PDT by blam
Rhode Island Is 'Being Crushed' By Pension Debt, Treasurer Urges Major Overhaul Of Retirement System
May 24, 2011, 5:56 PM
Rhode Island's retirement system needs a swift and dramatic overhaul to save the state from collapsing under its massive pension debt, according to a new report from state treasurer Gina Raimondo.
The report, out yesterday, suggests several radical solutions to the state's pension woes including, reducing benefits, suspending cost-of-living adjustments, raising the retirement age, and implementing a new "hybrid" retirement system that would couple a smaller pensions with a 401k-style plan.
The report, "Truth In Numbers: The Security and Sustainability of Rhode Island's Retirement System," also calls for more accurate and transparent accounting practices to avoid making the overly optimistic assumptions that the pension system has relied on in the past.
Rhode Island's current unfunded liability is $6.8 billion, according to the state's retirement board, and some experts argue that it could actually be as high as $9 billion. A recent Boston College study said that, in the absence of a major reform, state's pension fund could run out by 2023 .
Taxpayer contributions to the pension system doubled from $139 million in 2003 to $302 million in 2010 and are expected to rise $621.8 million by next year, Raimondo said Monday.
"Each day that the state avoids comprehensive reform, the liability grows," Raimondo, a Democrat, writes. "It is unfair to ask taxpayers to pay for the growing level of required contributions and it is dishonest to let state employees, teachers and retirees believe that full benefits will be there for their retirement. The time to act is now."
(Excerpt) Read more at businessinsider.com ...
My O My!
When will they ask for the federal taxpayers to help?
The following example is posted as to how and why pension reform needs to be undertaken in all states that are facing huge billion dollar unsustainable debts and bankruptcy:
Lifeguarding in OC is totally lucrative; some make over $200k
May 10th, 2011, 5:32 pm
High pay and benefits for lifeguards in Newport Beach is the latest example of frustrating levels of compensation for public employees. More than half the citys full-time lifeguards are paid a salary of over $100,000 and all but one of them collect more than $100,000 in total compensation including benefits.
When thinking about career options with high salaries, lifeguarding is probably not one of the first jobs to come to mind. But it apparently should. In one of Orange Countys most desirable beach destinations, Newport Beach, lifeguards are compensated all too well; especially compared with the county annual median household income of $71,735.
It might be time for a career change.
According to a city report on lifeguard pay for the calendar year 2010, of the 14 full-time lifeguards, 13 collected more than $120,000 in total compensation; one lifeguard collected $98,160.65. More than half the lifeguards collected more than $150,000 for 2010 with the two highest-paid collecting $211,451 and $203,481 in total compensation respectively. Even excluding benefits like health care and pension, more than half the lifeguards receive a total salary, including overtime pay, exceeding $100,000. And they also receive an annual allowance of $400 for Sun Protection. Many work four days a week, 10 hours a day.
Lifeguarding in Newport Beach is a pretty good gig, if you can get it.
There is no denying that lifeguards protect swimmers and play a vital safety role in protecting numerous beachgoers every year. In 2010, the total number of rescues by Newport Beach lifeguards was 2,190. Even so, these salaries seem too generous, and the compensation levels dont appear fiscally sane.
Currently, Newport Beach has 13 full-time active lifeguards and hires about 210 seasonal and part-time tower guards, Newport Beach City Manager David Kiff told us. Lifeguards are organized as part of the fire department. The Lifeguard Management Association represents the 13 full-time, salaried employees in collective bargaining with the city whereas the Association of Newport Beach Ocean Lifeguards represents the part-time, seasonal lifeguards.
In a phone conversation, Brent Jacobsen, president of the Lifeguard Management Association, defended the lifeguard pay in Newport Beach: We have negotiated very fair and very reasonable salaries in conjunction with comparable positions and other cities up and down the coast. Lifeguard salaries here are well within the norm of other city employees. And therein is the problem: Local public worker pay has become all too generous and out of line with private sector equivalents.
On face, the compensation packages for these guards are staggering. But take into consideration the retirement benefits being paid to currently retired lifeguards and lifeguards who will retire at these pay levels in the future and the problem is further compounded. Lifeguards are able to retire with 90 percent of their salary, after only 30 years of work at as early as the age of 50.
A YouTube video created by Americans for Prosperity-California, an education advocacy organization concerned with limited government, lower taxation, and free-market principles, outlined how in Newport Beach a recently retired lifeguard, age 51, receives a government retirement of over $108,000 per year for the rest of his life. The video also notes that He will make well over $3 million in retirement if he lives to age 80!
The Newport Beach City Council as well as other beach cities ought to take a hard look at reforming the pay scale and compensation for lifeguards as well as the way in which the department is organized. This is a reasonable starting point for applying some fiscal sanity to public employee compensation.
Let Rhode Island merge with Connecticut. We’d rid the Senate of a couple of morons.
It is this kind of debt, union debt, pension debt, retirement debt, healthcare debt, that is causing states like California, Massachusetts, Illinois and Michigan to go bankrupt.
Americans Work More Than 2 Hours Per Day to Pay Taxes
Americans who work 9 to 5 dont get to earn money for themselves until 11:13 a.m. each day before that, theyre working to pay taxes.
In 2011, Americans will devote 2 hours and 13 minutes of each 8-hour workday, or 27.7 percent of their working hours, to pay their share of taxes at the federal, state, and local level, the Tax Foundation reports.
But if the federal government was collecting enough in taxes this year to finance all of its spending, instead of borrowing, Americans would work past lunchtime, until 12:07 p.m., to cover their overall tax tab.
The biggest tax bite comes from individual income taxes. In addition to the federal government, all but seven states also levy an income tax, as do some localities. Total income taxes require 46 minutes of work in an 8-hour workday, according to the Tax Foundation, which does a similar analysis each year.
Social insurance taxes, including Social Security and Medicare, require 29 minutes of work, sales and excise taxes take 20 minutes to pay, property taxes require 16 minutes, and corporate income taxes require 16 minutes. The remaining 6 minutes go to estate and gift taxes, and other taxes.
Tax burdens in the states vary because of differing state income and sales taxes, and differing federal taxes due to income disparities.
Workers in Connecticut toil the longest to pay their taxes, until 11:40 a.m. New Jersey residents work until 11:36, and New Yorkers, until 11:30.
At the other end of the scale, workers in Mississippi work only until 10:51 to pay their taxes.
Back in 1940, Americans worked until 10:25 to pay their taxes, but the tax bite has gone up steadily since then.
The liberals chickens have come home to roost.
They created the Frankenstein monster, now they must deal with it.
All the states full of liberal Democrats now have the same problems, created by the same policies. They will collapse under the socialist dogma that they themselves have instilled in their voters for nearly a century. There is no more kicking the can down the road any longer. The bills are due and payment is demanded by the creditors. The beast is demanding to be fed and the larder is empty..........
RI’s proposals sound exactly like what Sen. Collins objects to in the Ryan plan.
A pox on all their houses.
The reason for the high pay for lifeguards is directly related to the fact that they are part of the fire department. Yes, they are basically union fire fighters. Here in Northern California our fire fighters have $100,000 salaries and an additional $150,000 in overtime. This is supposed to be a “good thing” because the fire district “avoids” pensions for the additional fire fighters they would have to hire if the overtime was eliminated. I live on a private road, but it does have a fire hydrant. The other day a fire truck came up and I thought it was strange so I want out to see what they were up to. They were putting down a new Blue Reflector on the road adjacent to the hydrant. A full company of fire fighters (4) and a pumper truck to glue a reflector on the roadway. That’s how our tax dollars are being spent. But then, if they weren’t doing this menial task, they’d just be back at the “house” having a barbeque or playing basket ball. Go Figure!!!
Just do what the Connecticut Gov. did,raise taxes 2.5 billion
I want there to be IMMEDIATE changes..
..state pensions ONLY paid to those staying in the state and paying income/sales/property taxes....
pensions only collectible at age 60 or higher....
a similified forumula for your pension in which you can NOT load up the last few years to double or triple your pension...
and I know alot of state govt pensions are not taxed by their respective states, but maybe they ought to be...at least a surcharge of some kind ...