Posted on 12/31/2010 9:43:04 AM PST by eagles
Mark Hemingway: America's public pension crisis has tragic consequences
By: Mark Hemingway 12/26/10 8:05 PM
When the police found the body of the town's 58-year-old retired fire marshal, the lights had been turned off in his house and he had no running water. He had no money to pay his bills and he was too proud to accept help from his neighbors.
Perhaps because he was so proud, the New York Times was polite enough not to use the fire marshal's name in their account of his death.
Welcome to Pritchard, Ala., where the public employee pension checks just stopped coming. As the Times reported last week, leaders of the city on the outskirts of Mobile had known since 2004 the pension fund was scheduled to run dry last year.
The city tried to declare bankruptcy, but state law forbids the town from ducking its pension obligations and a judge wouldn't allow it. The city just stopped paying its pensions. Pritchard's 150 retired city employees are reduced to showing up at city council meetings begging for money to get through the Christmas season.
For some years now, there have been warnings that the public pension crisis would sooner or later reach critical mass. America's public pension plans are underfunded by an estimated $3.6 trillion.
And the pension problem might be worse than that eye-popping figure suggests. We don't have a good handle on the scale of the problem because so many cities and states are either ignoring it or cooking their books to conceal it.
But what happened in Pritchard should send a message to the rest of America: It can happen here. We are out of money, and our many of our public pensions are already on borrowed time.
The biggest obstacle to preventing what happened in Pritchard from happening nationwide might be the public employees themselves. Public union leaders simply refuse to believe America is out of money.
Just last week, Chicago Mayor Richard M. Daley -- usually no proponent of fiscal austerity -- was begging Illinois Gov. Pat Quinn to veto a deal that would raise property taxes in the Windy City by $550 million to fund public pensions.
"This is the highest real estate tax increase in the history of Chicago and that's only for fire and police. If you put the other unions in there, it's about $1.2 billion in one year. ... This will really hit the people. How are you gonna sell your home even if you're retired? Who would want to buy your home? Buyer beware," Daley told the Chicago Sun-Times.
In Chicago, the unions claim they are making concessions. Police and fire fighters agreed to reduced cost-of-living increases, salary caps and raising the retirement age from 50 to 55. The legislature further offered a meaningless pledge to make sure their pension fund was 90 percent funded by 2041.
Is that supposed to be a fair trade-off? Taxpayers get sharp tax increases and can't sell their houses, but still pay for firefighters and police to retire with 80 percent of their salary and full benefits a decade or more before most Americans can even dream quitting their jobs? And pensions still won't be fully funded 30 years from now?
It's no mystery why the Times reported Pritchard "stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain." (Philadelphia is also raising property taxes 9.9 percent to fund pensions.)
If the busted public pensions in small-town Alabama make for a particularly tragic tale, what kind of misery is going to unfold when some of the largest towns and states in the country run out of money?
Mark Hemingway is an editorial page staff writer for The Examiner. He can be reached at mhemingway@washingtonexaminer.com. Get Email Alerts
Read more at the Washington Examiner: http://washingtonexaminer.com/opinion/columnists/2010/12/mark-hemingway-americas-public-pension-crisis-has-tragic-consequences#ixzz19i7ROUKQ
Cry me a river, “Public Employee” LEECHES!
It seems like they could at least get the name of the town right; it’s Prichard, not Pritchard. Even though I was argued with on a previous thread about this, Prichard has been broke for a long, long time. Their problems preceded the current economic situation.
The unions know it. They don't care.
"Auditors say the New Jersey Turnpike Authority wasted $43 million on unneeded perks and bonuses. In one case, an employee with a base salary of $73,469 earned $321,985 when all payouts and bonuses were included."
"The audit says that toll dollars were spent on items ranging from an employee bowling league to employee bonuses for working on birthdays."
"All this took place while tolls were being increased."
"The biggest expense uncovered in the audit was $30 million in unjustified bonuses to employees and management in 2008 and 2009 without consideration of performance."
"One example was paying employees overtime for removing snow and working holidays and then giving additional 'snow removal bonuses' and 'holiday bonuses.'"
58 years old and the sorry sob could not work, bs
When its either Us or Them, I hope the media doesn’t think they can convince Us it should be Them.
The whole country is screwed. Idiots who watch TV and Hollywood’s crap support this collective mass brainwashing about a kindly youthful Mugabe from Hawaii and Chicago. ALL of TV and ALL of Hollywood support him including Fox where people have posted here that Fox is making fun of birthers.
Loads of conservatives think in 2012 the problem will be solved. Some idiots here bash LTC Lakin for standing up to Obama. Lakin is right he knows how bad this is gonna get.
As far as this old fire chief. Oh well - you retire at 50 and you take your chances. A relative has two retired fire guys from NJ who may be gay. They are probably in their late 40s. It “ain’t” gonna last.
Indeed.
It's a town that has lost one-third of its population in the past 25 years and is now 90% African-American with almost 40% of its households consisting of single mothers with dependent children.
It has almost no tax base.
Me, too. They should never have set up the 30 year & retire policy. Even for police & fire-fighters. The fact that you may be too old for a physically demanding job doesn’t mean you can’t find something else to do after that career. Retirement age for all public employees should be 65, & if you can no longer meet the demands of your current job, you move on to something else & collect the pension later.
I also think they should have to choose between pension & SS. That would partially solve another problem we’re going to have to deal with.
“The unions know it. They don’t care.”
They care.....about making their boat payments.
This is a start.
These government pension funds are as bad as Democrat newspapers. Stop with the drip drip drip already and just die, for crying out loud.
Just like any ponzi scheme...
Hello McFly....
No they are counting on it...top down, inside out...presto we are communist...
Why do pubic unions get paid pensions in their 50’s when the rest of us have to wait to 65.
Saays the fire marshall was 58. How long was he retired and how long was he drawing a pension?
That was my reaction too. Of course, being an ex-firefighter, he could have had a disability of some kind.
???
Taxpayers grab their ankles for both. What's the difference?
If that estimate of public pensions under funded by 3.6 trillion is like most government estimates I say it is at least double that in reality. We all know they have trued to hide the situation for years, this is most likely no different.
>We are out of money, and our many of our public pensions are already on borrowed time.<
.
You think this will affect the generous pensions of our congress critters or will they be allowed to slobber at the trough till the very end?
This is what is going to happen when those who have not saved for retirement are confronted by reality. And then they will come for the money that has been saved for retirement - where ever they can find it.
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