Same old boring song and dance. Or is it? As everyone begins to fight and claw over a rapidly shrinking economic pie nobody wants to talk about the elephant in the room consuming everything in its path. And that is the public employee pension system. Every state is obviously different, but many are facing pension funding numbers that are bankrupting them. California is one of those states. Governor Schwarzenegger has been fighting to reform that system, but has met stiff resistance from one of the most irresponsible legislative bodies in the country, the California Assembly. (Yes, controlled by Democrats). The Governor has penned an opinion piece for the Wall Street Journal that talks about some of the numbers involved:
Much bigger increases in employee costs are on the horizon. Thanks to huge unfunded pension and retirement health-care promises granted by past governments, and also to deceptive pension-fund accounting that understated liabilities and overstated future investment returns, California is now saddled with $550 billion of retirement debt.
The cost of servicing that debt has grown at a rate of more than 15% annually over the last decade. This year, retirement benefits—more than $6 billion—will exceed what the state is spending on higher education. Next year, retirement costs will rise another 15%. In fact, they are destined to grow so much faster than state revenues that they threaten to suck up the money for every other program in the state budget.
Thats about right. While we all fight to continue to maintain valuable programs the truth is the current trends will wipe out ALL other programs if nothing is done. And those who continue to obstruct reform that is vital to our collective economic future are condemning all, including those they are professing to help, to a bleak outcome that will not be pretty.
Arnold Schwarzenegger has been kicked around pretty good in California, but he has told the truth about pensions and benefits for public employees.
Read the Wall Street Journal piece here.