wilburt
09-27-2006, 02:49 AM
I was reading an interesting article in the September 25th print edition of the San Francisco Examiner titled, BURDEN ON EMPLOYEE PENSIONS LOOMING.
The Examiner also has an online article that specifically addresses the public employee benefits issue at:
http://www.examiner.com/a-309177~Governments_could_be_overwhelmed_by_retiree _health_care_burden.html
It is quite clear that cities, counties, school districts and other municipal entities have caved into the threats and demands of teachers and public employees who are demanding lavish pay and benefit packages.
The problem is that in the end nobody is going to win. And, the end is coming soon because, as we can now see, cities and school districts in San Mateo County are being forced to curtail services and, in some cases, engage in deficit spending in order to pay the salaries and benefits of public employees and teachers.
The money is running out as a result of, what in my opinion is, the weak investment record of PERS and the fact that there simply is not enough money to support services at the current level and pay extravagant, budget busting retirement packages to former public employees who are "retired" and no longer perform their old jobs.
The public employee unions think that in order to fund the lavish pay and retirement packages that their members are receiving, California's taxpayers will just sit by and allow the California Treasury to be used as the union's piggy bank and, when that runs out, California's taxpayers will sit by and allow their taxes to be raised to pay for these public employee's lush retirement packages while municipal and educational services are significantly reduced.
Unfortunately, for the public employee unions and their members, reality is going to set in sooner than they think. The public employee unions and their members may have nothing if municipalities and the State of California file bankruptcy to get out from under the pension obligations. Think it can't happen? Well, if the bond rating agencies downgrade the debt of the State of California and California municipal governments and agencies to "junk" it will be nearly impossible to raise money by floating bonds.
The reality of the situation is that there may be a backlash against the retirees and unions by the majority of California's taxpayers. This will result in no new taxes being passed to fund the retirement plans and legislation being set in place to protect California's taxpayers from the gross negligence and irresponsibility that has resulted in this financial disaster. No bonds and no taxes equals no money to pay unfunded pension obligations.
Municipal retirees may soon find that their retirement benefits will be cut back or curtailed to reflect benefits received by other retirees. Or, municipal entities may just file bankruptcy and leave the municipal retirees with nothing or significantly less then they thought they had coming. Airplane pilots and other people in the airline industry can relate to this scenario.
For too long, municipal governments and school districts have been forced to meet the unrealistic terms of the municipal employee and teacher's unions representing their employees. Now, the financial day of reckoning is on the horizon.
The teachers in the San Mateo Union High School District (SMUHSD) who are protesting about these necessary layoffs appear to be living in a fantasy world where money grows on trees. This is a common affliction of people who do not earn their living in the "private sector". Many of these people do not understand the process by which a dollar is created in the private sector to generate the tax revenues that support their lifestyles and generous pay/retirement packages. If they did, California's State and local governments probably wouldn't be facing the severe financial problems they are facing today.
These SMUHSD employees who are vigorously protesting these necessary layoffs should consider their position carefully because if they do force the SMUHSD to bust its budget it may not be long before the word "bankruptcy" starts being used. With real property values on the decline, it also won't be long before property owners start demanding reassessments of their property. This will reduce the amount of revenue available to the school districts.
Of course, if the SMUHSD were to consider bankruptcy, the very same people (i.e., the protesting teachers) would be down at the SMUHSD yelling and screaming about how irresponsible the SMUHSD Administration is and how could they have let the SMUHSD get in such a position. The answer to that question will be because the teachers put the SMUHSD in the position where bankruptcy became a feasible alternative.
The Examiner also has an online article that specifically addresses the public employee benefits issue at:
http://www.examiner.com/a-309177~Governments_could_be_overwhelmed_by_retiree _health_care_burden.html
It is quite clear that cities, counties, school districts and other municipal entities have caved into the threats and demands of teachers and public employees who are demanding lavish pay and benefit packages.
The problem is that in the end nobody is going to win. And, the end is coming soon because, as we can now see, cities and school districts in San Mateo County are being forced to curtail services and, in some cases, engage in deficit spending in order to pay the salaries and benefits of public employees and teachers.
The money is running out as a result of, what in my opinion is, the weak investment record of PERS and the fact that there simply is not enough money to support services at the current level and pay extravagant, budget busting retirement packages to former public employees who are "retired" and no longer perform their old jobs.
The public employee unions think that in order to fund the lavish pay and retirement packages that their members are receiving, California's taxpayers will just sit by and allow the California Treasury to be used as the union's piggy bank and, when that runs out, California's taxpayers will sit by and allow their taxes to be raised to pay for these public employee's lush retirement packages while municipal and educational services are significantly reduced.
Unfortunately, for the public employee unions and their members, reality is going to set in sooner than they think. The public employee unions and their members may have nothing if municipalities and the State of California file bankruptcy to get out from under the pension obligations. Think it can't happen? Well, if the bond rating agencies downgrade the debt of the State of California and California municipal governments and agencies to "junk" it will be nearly impossible to raise money by floating bonds.
The reality of the situation is that there may be a backlash against the retirees and unions by the majority of California's taxpayers. This will result in no new taxes being passed to fund the retirement plans and legislation being set in place to protect California's taxpayers from the gross negligence and irresponsibility that has resulted in this financial disaster. No bonds and no taxes equals no money to pay unfunded pension obligations.
Municipal retirees may soon find that their retirement benefits will be cut back or curtailed to reflect benefits received by other retirees. Or, municipal entities may just file bankruptcy and leave the municipal retirees with nothing or significantly less then they thought they had coming. Airplane pilots and other people in the airline industry can relate to this scenario.
For too long, municipal governments and school districts have been forced to meet the unrealistic terms of the municipal employee and teacher's unions representing their employees. Now, the financial day of reckoning is on the horizon.
The teachers in the San Mateo Union High School District (SMUHSD) who are protesting about these necessary layoffs appear to be living in a fantasy world where money grows on trees. This is a common affliction of people who do not earn their living in the "private sector". Many of these people do not understand the process by which a dollar is created in the private sector to generate the tax revenues that support their lifestyles and generous pay/retirement packages. If they did, California's State and local governments probably wouldn't be facing the severe financial problems they are facing today.
These SMUHSD employees who are vigorously protesting these necessary layoffs should consider their position carefully because if they do force the SMUHSD to bust its budget it may not be long before the word "bankruptcy" starts being used. With real property values on the decline, it also won't be long before property owners start demanding reassessments of their property. This will reduce the amount of revenue available to the school districts.
Of course, if the SMUHSD were to consider bankruptcy, the very same people (i.e., the protesting teachers) would be down at the SMUHSD yelling and screaming about how irresponsible the SMUHSD Administration is and how could they have let the SMUHSD get in such a position. The answer to that question will be because the teachers put the SMUHSD in the position where bankruptcy became a feasible alternative.