Public pensions: The coming crisis

In New York, retired public hospital executive Edward A. Stolzenberg collects a $222,143 annual pension. Hugo Tassone, a retired police officer, receives $101,333 a year—at age 44. In California, more than 9,000 retired public workers collect annual pensions in excess of $100,000. Because of lavish benefits like these, public pension systems are going bust, said Mary Williams Walsh and Amy Schoenfeld in The New York Times. State and local pension plans already face a collective deficit of $1 trillion or more, and it’s likely to get much worse in coming years. Politicians are worried that the “outsize retirement pay” will cause a public backlash, at a time when state and municipal budgets are strained and “everything from poison-control centers to Alzheimer’s day care is being cut.” Yet mayors, governors, and legislators say their hands are tied: Cutting pensions, or even “reducing benefits for their existing employees, is considered impossible under the current laws of most states.”

How did we get in this mess? asked Laura Cohn in The Washington Post. “Simply put, the states didn’t make big enough payments to their pension plans, they failed to squirrel away enough money to pay retiree health benefits, and, perhaps most egregious, they increased their benefits without figuring out how to pay for them.” Then the financial crisis of recent years badly eroded the dollars that pension funds invested in stocks and bonds. Now politicians are threatening to scapegoat public workers by eliminating guaranteed pensions, said Raymond Edmondson, CEO of the Florida Public Pension Trustees Association, in the South Florida Sun-Sentinel. But people who faithfully served the public for decades shouldn’t be penalized for politicians’ mistakes.

Politicians and public employees have been partners in this scam all along, said Mortimer B. Zuckerman in USNews.com. Public-sector unions deliver campaign workers and votes to politicians. Once elected, the politicians approve obscene benefits with “gold-plated perks” for the unions, taking taxpayers along “for an expensive ride.” For example, candidates looking to “appear tough on crime” often seek endorsements from police unions, and then repay the favor at contract time. If we don’t break this “ruinously expensive collaboration between elected officials and unionized state and local workers,” we will never get out from under our massive public pension burdens. Quite simply, they “will crush us.”

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