Time for another bailout? States face $1.26 trillion shortfall in funds to pay retiree benefits

[Karmadillo]

Just kidding. No bailout for these losers. It's not like they're bankers or defense contractors.

http://www.washingtonpost.com/business/economy/states-face-126-trillion-shortfall-in-funds-to-pay-retiree-benefits/2011/04/25/AFpprVmE_story.html

By Michael A. Fletcher, Tuesday, April 26, 12:08 AM

The state funds that pay pension and health-care benefits to retired teachers, corrections officers and millions of other public workers faced a cumulative shortfall of at least $1.26 trillion at the end of fiscal 2009, according to a new report.

The study, to be released Tuesday by the Pew Center on the States, found that the pension and health-care funding gap increased by 26 percent over the previous year. Pew officials said the growing shortfall was driven by inadequate state contributions, an aging population and market losses that accompanied the recession.

Although investment markets have recovered substantially since the period covered by the report, its authors warn that states still face an increasing burden from retiree costs that are beginning to crowd out critical services.

“In many states, the bill for public-sector retirement benefits already threatens strained budgets and is competing for resources with other critical needs, including education, infrastructure and health care,” said Susan Urahn, managing director of the Pew Center on the States.

more...

[notesdev]

1. Ain't gonna happen

States that are not in terrible shape are going to be in no mood to subsidize those who are. Each state is going to need to get its own house in order on its lonesome.

[WCGreen]

2. One of the main sources for the this problem is that the State Governments

from both parties, put off their contribution match to these funds in order to avoid raising taxes or cutting spending. Now that they owe into these funds, they are balking at doing what they are legally charged to do.

[Oilwellian]

3. The major source for this problem

Wall Street raided state & federal pensions during their feeding frenzy. This headline does not surprise me in the least.

On edit: The feeding frenzy continues, unabated.

[Yo_Mama]

4. We need to assure funding for Social Security & Medicare first

Seriously. This is a lot of money; we can't be spending it until we figure out to pay for the basics for other retirees.