Sunday, July 22, 2012

Rising pension costs push California cities to fiscal brink

California--it's the same story all over that state--

Rising costs push California cities to fiscal brink - "Rising public pension costs are one of the catalysts pushing cities into fiscal peril. In San Bernardino, the city's obligation to its employee retirement system rose from $1 million in the 2006-07 fiscal year to nearly double that in the current budget year. In three years, those costs are expected to swallow up 15% of the budget. Pension spending grew an average of 11.4% a year in the state's biggest cities and counties between 1999 and 2010, roughly twice as fast as spending on public safety, social services, recreation, health and sanitation, according to a February report by the Stanford Institute for Economic Policy Research. Joe Nation, a Stanford economics professor and co-author of the February report, thinks that for at least some cities, insolvency is inevitable unless they can wrest much bigger concessions on salaries and pensions from public employees. "I think this is the tip of the iceberg in terms of the problem,'' Nation said. "Stockton was spending $12 [million] or $13 million on pensions 10 years ago. By 2010, it was $30 million … and will double again over the next five years, unless something is changed.""

Public pensions need to be abolished--they've become just another way for "public servants" to rob the public treasury.  Public pensions (and private pensions) need to be abolished and replaced with tax-sheltered, self-funded retirement accounts.

Note one reader's comment to the above story--

"Go ahead and go bankrupt, its the only way to get rid of those idiotic overpaid pensions that should NEVER have been agreed to in the first place. Municipalities should outsource ALL services to private companies and pay only current cash for current services. If employees want a pension, let them save for it themselves like the rest of us do."


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