In many states there simply isn’t enough money to pay for the pensions state workers negotiated with union friendly politicians back in the pre-recession days.
Even under robust economic conditions many of the pension obligations were unreasonable. But now? In the “new normal?” With potentially more real economic pain on the wing? No way. Something is going to have to give and the thing is taxpayers have given enough already. State employees are going to have to come to terms with the “new normal” too. That is, with less money from taxpayers in retirement.
Illinois, Connecticut Louisiana, New Jersey Maryland, Kentucky, New Mexico, West Virginia, California and Hawaii now need to spend 5 percent or more of their revenues to keep up with pension fund payments.
In Illinois, which is halfway through the current fiscal year without an approved budget, the funding required to meet pension obligations accounts for 12 cents of every dollar of state revenues. Last year, the state made only 88 percent of that payment.
And it is interesting that in the attached article that they make reference to state pensions being “underfunded.” Now why might that be? It’s not like the state employees were getting gypped by anyone. The problem was there was no blood to squeeze from the taxpayer stone.