Across the country, state and local governments are revealing entitlement promises to current and retired employees that can’t possibly be upheld without monster tax hikes. Typically, these inflated pensions and benefit packages were handed over by lawmakers under pressure from public employee unions in exchange for keeping said lawmakers in office. This week’s news brings several new warnings of fiscal doom:
- New Jersey: New calculations indicate that the state’s pension obligations to (heavily unionized) public-sector employees are likely underfunded by $56 billion, or, as some quick math (using American Community Survey statistics) indicates, a $17,809 shortfall per household.
- Oklahoma: The teachers pension fund is $7.5 billion short, a hole that will need plugging with $5,439 per household.
- Maryland — $23 billion ($11,033/household), Alabama — $19.8 billion ($11,053/household), Maine — $3.3 billion ($6,092/household): These benefits shortfalls and more were written up by the Public Service Research Foundation‘s David Denholm here.
- California: The state’s $100+ billion pension and health benefits funding shortfall prompted The San Diego Union-Tribune to editorialize on Monday:
Year in and year out, it is plain that the Legislature’s No. 1 priority is protecting public employees. This is not just a conservative talking point; it is a fact. It is why in 2005, the liberal Los Angeles Times editorial page made the shocking decision to endorse Proposition 75, which would have allowed members of public employee unions to bar their dues from being used for politics. The unions have such power, the Times wrote, that governing in California often “becomes an exercise in self-dealing.”