Tag archive for health benefits

When reporters don’t bother reading budgets….

The Grey Lady had a story Monday on how Los Angeles can’t afford to invest in its crumbling infrastructure because of a continuing budget squeeze. The story starts off with an embarrassing mistake, confusing the LA County budget ($26 billion) for the city budget ($8.1 billion)–see correction at end of later editions. Then it contains not a single other budget number of consequence throughout, suggesting the reporter never bothered (or wasn’t capable of) reading the city’s budget. That’s one reason why the story only briefly mentions pensions but hangs the problem on a host of other issues including (wait for it) Californians’ aversion to higher taxes (yeah, really)…

Were San Jose workers really ‘victims’ of their politicians?

Monday’s New York Times piece on San Jose’s efforts to sustain the pension reforms voted by city residents contains a few lines that carry forward a theme emerging in other articles about severely underfunded pensions, namely that the employees were just victims of politicians who promised them …

Report: governments now doing less with more

We’ve all heard of governments “doing more with less” and “doing less with less” but, according to “Government Crowded Out,” a new report by Dan Disalvo, the real trend is “doing less with more.” The recession ended four years ago, since which time the economy has grown, but public services have seen no appreciable improvement. The increase in revenues has been absorbed by pension and healthcare costs, leaving no more room in budgets for service enhancements. Less with more. 
The report documents several examples of this “crowding out” effect in cities across the nation. In Los Angeles, pensions took up 3% of the budget ten years ago, now they’re 18%. Des Moines, Iowa has raised taxes and cut back on trash collection and street cleaning in order to cope with a 20% increase in police and fire pension costs over two years. During Mayor Bloomberg’s eleven-year tenure, New York’s budget has grown by almost 50% on an inflation-adjusted basis. But the ranks of uniformed police and fire have declined by 3,300 due primarily to rising benefit costs.  

Pension Reform Effort Dies in Florida

A law that would have moved all of Florida’s new state and municipal workers who participate in the Florida retirement system into 401(k) style plans failed yesterday, as about one-third of Republicans in the state senate joined Democrats in voting against the plan. The chief proponent of the law, Florida House Speaker Will Weatherford, argued that the system’s recent poor investment returns had created an underfunded problem that was going to force the state to contribute $500 million more annually.

Taxpayers are losers in Stockton, no matter what

In the last several days I’ve been asked by media outlets a number of times whether the bankruptcy judge’s ruling on Monday that Stockton’s Chapter 9 filing can go forward represented a victory for taxpayers. If so, it’s a hollow victory, at best. The judge himself made that clear in the text of the ruling, in which he elaborated on the depredations currently being suffered by Stockton residents. I know that some think that Chapter 9 is a great way to give unions their comeuppance by voiding contracts and reducing retirement benefits, but taxpayers are  always the losers by the time we get to the point that a city qualifies for bankruptcy, as the judge ruled. It’s worth listening to some of the judge’s descriptions of what’s going on in Stockton.  

Illinois residents pay more, get less, face a strike

Illinois’ legislators approved a nearly $7 billion set of tax hikes, including a two-thirds increase in income taxes, early in 2011 in order to deal with a massive budget deficit and a growing backlog of unpaid bills. But two years later Gov. Quinn’s newest budget …

Retiree healthcare solution: Let Obamacare pay for it!!!

Last week I wrote about a report that called Chicago’s pledge to subsidize the health insurance premiums of retired city workers unsustainable. The program already costs the city $109 million annually and its cost is projected to grow to $540 million in a decade, as the ranks of retirees grows. Now one member of the commission that issued the report has a solution. Let Obamacare pay for it!

Study concludes Chicago can’t afford retiree health care program

A commission chaired by the City of Chicago’s Comptroller issued a report earlier this week which said that Chicago can no longer afford its subsidies for government worker retiree health care, which currently cost the city $109 million annually but would grow to nearly $500 million in a decade thanks to projected increases in the number of retirees and in health care costs.The commission offered Mayor Rahm Emanuel a series of suggestions on how to change the program to save money, including having workers pay a greater percentage of their own health care premiums in retirement, but it also concluded that the city might want to simply end the subsidy program, a move which almost certainly would be challenged in court.

2 scary charts about state, local debt

Back in 1995, the U.S. General Accounting Office (now the Government Accountability Office) estimated state and local unfunded pension liabilities at $200 billion in fiscal year 1992 (nearly $300 billion in today’s dollars). The most recent estimate for unfunded liabilities today for these same entities comes from The States Project, a joint venture of Harvard and the University of Pennsylvania. Their report puts the number at $3.4 trillion, plus $1.2 trillion in health care promises to government workers in retirement which haven’t been funded. On top of this is the growth in state bonded debt.

state pension debt 1995.jpg

Health benefits: still richer in the public sector

A new Kaiser Foundation “Snapshot”  of findings from Kaiser’s annual “Healthcare Benefits Survey”  demonstrates, yet again, that government employees’ health benefits are more generous than their private sector counterparts’. And in every respect.