It sure is easy for politicians to make promises. It just ain’t easy to fullfill them. The story below is about the Pennsylvnia state budget. It is the same story across all states. Politicians sign legislation giving out goodies to get re-elected. The time bomb doesn’t explode for a decade or more, after the slimy politician is running the Department of Homeland Security or being paid as an Obama shill on MSNBC. The lack of courage, fortitude, honesty and intelligence extends across both parties. Tom Ridge signed legislation in 2001 that provided gold plated pension benefits to government workers and the slimy politicians that voted for the legislation. Ed Rendell further extended and increased these benefit promises. You can see from this chart that PA is not even the worst offender.
A recent study estimated that the unfunded pension liabilities for state government workers exceeds $4 trillion. In classic government fashion, Governor Corbett of PA is being branded a scrooge for drastically cutting spending and impoverishing school districts across the state. That is humorous since this year’s budget is $27.3 billion and next year’s budget will be $27.7. Only in this land of delusions could a $400 million increase be described as horrific cutbacks in government spending. There is never a mention about the fact that every school district in the state went on a spending spree in the mid-2000s because the real estate taxes from the housing boom were rolling in like waves on the ocean. Well the waves have receded from the shore and a Tsunami of unfunded promises are about to wash over the delusional morons who spent all the money and made all the promises to government employees.
The wailing and grinding of teeth over this year’s budget is laughable when you consider what is coming. The taxpayers must foot a $1.2 pension expense for the government drones this year, or 4.3% of the state spending. These pension payments are on automatic pilot. In 2016, the taxpayers of PA will be on the hook for $6 billion of pension expense, or approximately 20% of the state spending. This is called math. Either the taxpayers of PA will have to pay a whole lot more in taxes or drastic spending cuts will need to occur in other parts of the budget. There are 5.2 million households in PA. Each would have to pay over $900 more per year in taxes to pay for the pension promises made to government union drones. We all know that the FSA in Philly and Pittsburgh don’t pay taxes, so the average hard working middle class schmuck would have to ante up over $1,200 more per year to satisfy the insatiable appetite of government union workers.
This tapeworm was introduced into the digestive system of Pennsylvania by a Republican governor in 2001. He’s rich. He earns money for speaking engagements. He started our beloved DHS. This brilliant guy even invented our color coded terrorist warning system. We are now at Shit Your Pants Yellow alert. By 2016 we’ll be at Commit Suicide Red.
Will any politicians have the guts to confront the government unions and kill this pension parasite before it kills us all? I doubt it. There are elections to be won and promises to be made. That tapeworm looks harmless.
Funding Pa. pensions is ‘tapeworm’ in budget talks
Wednesday, June 6,2012
It’s crunch time in Harrisburg. In other words, it’s budget time.
As school districts across the state reel from the effects of an austere spending plan put forth by Gov. Tom Corbett, Republicans in the state Senate have created their own budget and restored many of the cuts proposed by their fellow Republican governor. The state House is expected to vote on that version this week, possibly as early as today. Then both sides likely will hammer out a final version with the governor.
Here’s the good news: Some education funding is likely to be restored, in particular when it comes to higher education.
Here’s the bad news: It won’t necessarily solve the fiscal woes afflicting school districts.
Now here’s the really grim news: None of this even addresses the elephant in the room, the biggest budget crisis in the state.
That, of course, would be the ocean of red ink inundating the state’s two large public employee pensions, those covering the bulk of state government workers and public school teachers.
This year the state’s on the hook for $1.2 billion in pension payments. That increases to $1.6 billion next year and an astronomical $6 billion by fiscal year 2016-17.
Perhaps that is why Corbett is reluctant to start restoring money to the budget. He refers to the pension crisis as “the tapeworm” in state budget talks.
The pension crisis has been exacerbated by several factors. First, while enjoying a bullish ride on Wall Street for years, the state and districts looked at more rosy predictions and cut their contributions to the fund. Then the market tanked.
Also crucial was a deal cut by former Gov. Tom Ridge back in 2001 that boosted the payouts for pols and teachers while cutting taxpayer contributions.
Now the bill is coming due, and it’s a whopper. It won’t solve the current dilemma, but some denizens of Harrisburg with an eye on the future are offering an important change.
State Senate Majority Leader Dominic Pileggi, R-9 of Chester, is proposing legislation that would derail this gravy train for all future public employees. Instead of the defined benefit plan those workers now enjoy, they would instead join the rest of us in a defined-contribution plan, similar to a 401(k).
It’s a common-sense move that is long overdue. Sure, it would be easy to harpoon Pileggi and several other Republicans for cutting someone else’s retirement benefits while theirs remains intact. It won’t change the fact that the current system is unsustainable.
More importantly, it does not address how the state is going to fund its current pension woes.
What almost no one in Harrisburg is willing to say is the very real possibility of someone actually proclaiming what many are thinking – that as currently constructed the system, will not be able to pay out what was promised.
One possible solution would be to reconfigure pensions to their pre-2001 levels. That no doubt would be met with catcalls from those approaching retirement.
The move to get public employees out of defined-benefit plans is a start. But it must be accompanied by a solution to the more immediate problem — that $6 billion tab lurking in the distance.
One thing we’re sure of. This tapeworm is hungry. And it’s not going away.
— Journal Register News Service