Public pensions do not threaten state and local finances, major studies are showing

[Hannah Bell]

Despite the drumbeat of claims from corporate media (including in Chicago the Chicago Tribune properties and the Chicago Sun-Times), there is no evidence that public worker pensions are threatening state and local finances, as the latest attack on the working class from finance capital is claiming. While a closer look at local and state finances (including Chicago) would show that a larger threat is coming from fees, charges, and debt service to the nation's largest banks and law firms, the attack on public worker pension funds continues. That raises the question of why it is taking place, and why now.

There are several answers, but the simplest one is that the consolidation of propaganda into the nation's corporate media has nearly destroyed any independent versions of reality, and narrowed the debate between "center" and "right" to, in actuality, two versions of the far right. Beginning at the latest with the Clinton administration, national policies of the Democratic party have simply been what might be termed "reactionary lite," while with every compromise by Democratic Party political leaders has allowed the Republican Party to shift the "center" of policy debate further to the right. The result is that at this point, the notion that unbridled "free market" policies is the only way to view social solutions to complex economic, social and political problems has taken hold in the dominant narrative.

The facts of history, as reported in the lengthy study below (first published in the Miami Herald) are much more straightforward: "States having the biggest problems with pension obligations tend to be struggling with overall fiscal woes — New Jersey and Illinois in particular. Many states are now wrestling with underfunding because they didn't contribute enough during boom years," the newspaper reports.

http://www.mcclatchydc.com/2011/03/06/109649/why-employee-pensions-arent-bankrupting.html

Why Employee Pensions aren't Bankrupting States, By Kevin G. Hall, McClatchy Newspapers, The Miami Herald, March 06, 2011 (http://www.mcclatchydc.com /2011/03/06/109649/why-employee-pensions-arent-bankrupting.html)



At both the state and Chicago levels, politicians used the state teachers' pension fund (the "Teacher Retirement System," or TRS) and the Chicago Teachers Pension Fund (CTPF) as a political piggy bank. They combined to refuse to make required payments (in Chicago, for almost a decade) using technicalities, or actually borrowed from the fund.

Then, when the stock market crashed and reduced expected earnings from investments, political leaders ignored the history they had helped create and instead tried to blame the pensioners, both present and future...

Pension contributions from state and local employers aren't blowing up budgets. They amount to just 2.9 percent of state spending, on average, according to the National Association of State Retirement Administrators. The Center for Retirement Research at Boston College puts the figure a bit higher at 3.8 percent.


http://www.substancenews.net/articles.php?page=2095§ion=Article

[drm604]

1. K&R

:kick:

[fittosurvive]

2. More deceptive accounting...?

[Scuba]

3. Cook the books, manage the spin. The right is evil. n/t

[no_hypocrisy]

4. They do if the state took the money out of the pension fund and has to replace it

like in the case of New Jersey. Republican and democratic governors have used the pension fund for teachers for more than a decade to close budget gaps. In other words, took the salaries of teachers who already paid their taxes. Said it "borrowed" but really "plundered" the funds from the pension program. The monies not invested, just not there period.

And New Jersey doesn't have the money to replace the missing money.
http://www.nj.com/news/index.ssf/2009/04/report_finds_15b_gap_in_nj_tea.html

http://newjersey.statebudgetwatch.org/2010/03/21/nj-teachers-pension-fund-also-critically-underfunded/

[ElsewheresDaughter]

5. In 97 Whitman borrowed/raided 45 billion from fire fighter pensions and never repaid a penny....

and now another Christie wants to raid all rest of it from us.

or rather NJ taxpayers owes 45.6 billion to the fire fighters pensions

http://www.northjersey.com/recap/87610287_N_J__TAXPAYERS_OWE_PENSION_FUND.html

[no_hypocrisy]

7. + 1,000,0000

[ProgressiveProfessor]

11. CA governors, including Brown, used to raid CalPERS until an initiative stopped them

[old mark]

6. K&R-Agree, and always knew that...but you are introducing FACTS,

something the right has no interest in. They like big lies, repeated many times. It worked great for Hitler, and it is working now for the RWers in the US.

mark

[ProgressiveProfessor]

8. Are the plans actuarially sound? If they are not, who is responsible to make them sound?

Those are the two key questions that no one wants to have answered. It is an apolitical question.

[Hannah Bell]

9. no, it's not an apolitical question at all.

[ProgressiveProfessor]

10. Actuarial soundness is a political question? By what measure

The accounting standards are quite clear.

Who should make up shortfalls could be, depending on how the plan is structured, but it too should be pretty straight forward.