Public pensions must be on the table
With the cost of retirement plans soaring, public employees need to do their part in balancing state budgets.
Earlier this month Ohio voters repealed a new law that would have done just that. Now in Wisconsin a petition drive is trying to force a recall election next year to remove from office Republican Gov. Scott Walker, who championed a similar restriction on public employees in that state.
But those events don’t necessarily reject a key goal of these pieces of legislation: to get a handle on the surging costs of pension plans for state workers.
Together US states face a monumental $1.26 trillion gap between the cost of benefits they’ve promised to their public employees and the funds they’ve set aside to cover those costs, according to the Pew Center on the States.
Losses in investment values, state revenue shortfalls, and soaring pension costs are making pension plans quickly untenable in many states. In Rhode Island, for example, the unfunded liability for public employee pensions is $7 billion, only a little less than the entire annual state budget.
While the Ohio and Wisconsin efforts were spearheaded by Republicans, the situation has gotten so bad that even Democratic governors and legislatures, which count on the political backing of public unions, are looking at ways to adjust public pensions.