[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Mail]  [Sign-in]  [Setup]  [Help]  [Register] 

‘Man Spreaders,’ There’s No Excuse for Not Closing Your Legs on the Subway

Four words that could deep-six Obamacare

Brat: 'Not one thin dime' for Obama's immigration plan

How Hollywood Accounting Can Make a $450 Million Movie 'Unprofitable'

Impeach President Obama—Why When Where and How

Georgia Man Shoots & Kills Man Who Mistakenly Pulled Into Driveway; Misdemeanor, $500 Fine (Castle Doctrine)

The Benghazi Brief – “Operation Zero Footprint” – What We Know About The Benghazi Mission, And Subsequent Attack

Ferguson Protests Grow Larger: ‘We Don’t Give a F--- about Your Laws’

How $10,000 In The Bank In 2008 Lost Over $7000 Of Wealth by 2013

The Use and Abuse of Executive Orders and Other Presidential Directives

BREAKING REPORT: DOJ Is Threatening #Ferguson Prosecutor With Bias Order Over No Indictment

‘Now, That’s What I Call a Friday News Dump’: Final Report Released After Two-Year Investigation Into Benghazi

Security Experts: What to do if protesters surround your car.

Liberal 2016 poll: Elizabeth Warren beating Clinton by double digits

FBI arrests two in connection with plot to set off bomb during protests - Ferguson

Arpaio v Obama, DCDC 14-cv-01966, Doc 1 COMPLAINT

Obama’s Amnesty Is The Act Of A Rogue President

Bandits in Guinea steal blood samples believed to be infected with Ebola

30,000 missing emails from IRS' Lerner recovered

House of Representatives v Burwell (COMPLAINT)

Obama releases Gitmo detainees, setting up fight with GOP

Texas Leaders Ready to Fight After Obama's Executive Action

HOUSE FILES CHALLENGE OVER THE CHANGES TO THE AFFORDABLE CARE ACT

Will Scripted Ferguson Agenda Overshadow the Executive Amnesty Announcement?

Diplomat dumps burqa-clad fiancée due to crossed-eyes, beard

U.S. Senate Votes Against Freedom in the USA (Again)

Sheriff Joe Arpaio Files Lawsuit Against Obama over Amnesty Executive Order

HILLARY CLINTON: 'I SUPPORT THE PRESIDENT'S DECISION'

Patriots Headed to White House; Arrest Obama NOW! Pete Santilli Interviews US Marine Manny Vega

JEFF SESSIONS: NOW IS ‘TIME TO STAND STRONG’ AGAINST OBAMA’S ILLEGAL AMNESTY TO PROTECT AMERICAN WORKERS AND THEIR FAMILIES

Reagan and Bush Offer No Precedent for Obama's Amnesty Order

Bachmann to America: Come to D.C. on Dec. 3 & Rally to 'Defund Amnesty'

No, Reagan Did Not Offer An Amnesty By Lawless Executive Order

No, ‘Prosecutorial Discretion’ Does Not Justify Obama’s Lawless Amnesty

A Law Enforcement Perspective on Obama’s Lawlessness

The last reich ... obombacare - amnesty --- bread - circus - stepford nastion !

Here’s Obama’s Immigration Speech In Full--transcript

Obama's speech live

Jim Webb Forms Exploratory Committee for White House (Reagan Democrat)

Somali Actor who played Somali pirate in Tom Hanks blockbuster 'Captain Phillips' is jailed for vicious assault -- Sentencing Judge/Fanboi Impressed with Somali "Actors"

Muslims Chant to Remove Jesus at WashingtonÂ’s National Cathedral

Tipping Point: 50% of Americans reject the D&R terrorist party

Jordanian Parliament Prays for “Spirits of Heroes” Who Murdered 4 Rabbis

Does John Boehner Believe That Perjury About Sex Is Worse Then Obama Acting Like A Dictator And Bypassing Congress To Make Law?

mohammed obomba atta ... toppling the the twin towers --- of our country - constitution !

First Time In History A Sitting U.S. President Authorizes And Supports Terrorism On American Soil

BREAKING: GOODLATTE, MCCALL DEMAND PRESIDENT OBAMA RESPECT THE CONSTITUTION, Abandon Unilateral Plan To Move On Immigration

REPUBLICANS CAN STOP EXECUTIVE ORDER AMNESTY DEAD

‘OPEN REBELLION’: CHAOS IF REPUBLICANS DON’T WITHHOLD FUNDING FOR OBAMA EXECUTIVE AMNESTY

White House hits TV networks for skipping immigration address


Status: Not Logged In; Sign In

United States News
See other United States News Articles

Title: How Retirement Benefits May Sink the States
Source: WSJ.com
URL Source: http://online.wsj.com/article/SB100 ... 0.html?mod=WSJ_Opinion_LEADTop
Published: Apr 30, 2012
Author: STEVEN MALANGA
Post Date: 2012-04-30 06:17:45 by CZ82
Keywords: None
Views: 386
Comments: 2

How Retirement Benefits May Sink the States

Illinois is a lesson in why companies are starting to pay more attention to the long-term fiscal prospects of governments..

By STEVEN MALANGA

Chicago Mayor Rahm Emanuel recently offered a stark assessment of the threat to his state's future that is posed by mounting pension and retiree health-care bills for government workers. Unless Illinois enacts reform quickly, he said, the costs of these programs will force taxes so high that, "You won't recruit a business, you won't recruit a family to live here."

We're likely to hear more such worries in coming years. That's because state and local governments across the country have accumulated several trillion dollars in unfunded retirement promises to public-sector workers, the costs of which will increasingly force taxes higher and crowd out other spending. Already businesses and residents are slowly starting to sit up and notice.

"Companies don't want to buy shares in a phenomenal tax burden that will unfold over the decades," the Chicago Tribune observed after Mr. Emanuel issued his warning on April 4. And neither will citizens.

Government retiree costs are likely to play an increasing role in the competition among states for business and people, because these liabilities are not evenly distributed. Some states have enormous retiree obligations that they will somehow have to pay; others have enacted significant reforms, or never made lofty promises to their workers in the first place.

Indiana's debt for unfunded retiree health-care benefits, for example, amounts to just $81 per person. Neighboring Illinois's accumulated obligations for the same benefit average $3,399 per person.

Illinois is an object lesson in why firms are starting to pay more attention to the long-term fiscal prospects of communities. Early last year, the state imposed $7 billion in new taxes on residents and business, pledging to use the money to eliminate its deficit and pay down a backlog of unpaid bills (to Medicaid providers, state vendors and delayed tax refunds to businesses). But more than a year later, the state is in worse fiscal shape, with its total deficit expected to increase to $5 billion from $4.6 billion, according to an estimate by the Civic Federation of Chicago.

Rising pension costs will eat up much of the tax increase. Illinois borrowed money in the last two years to make contributions to its public pension funds. This year, under pressure to stop adding to its debt, the legislature must make its pension contributions out of tax money. That will cost $4.1 billion plus an additional $1.6 billion in interest payments on previous pension borrowings.

Business leaders are now speaking openly about Illinois' fiscal failures. Jim Farrell, the former CEO of Illinois Toolworks who is heading a budget reform effort called Illinois Is Broke, said last year that the state is squandering its inherent advantages as a business location because "all the other good stuff doesn't make up for the [fiscal] calamity that's on the way." Caterpillar, the giant Peoria-based maker of heavy construction machinery, made the same point more vividly when it declined in February to locate a new factory in Illinois, specifically citing concern about the state's "business climate and overall fiscal health."

California is another place where businesses have come to view three years of budget uncertainty and huge pension liabilities (not to mention the state's already high taxes and complex regulatory regime) as an inducement to migrate elsewhere. The state and its municipalities already face unfunded pension bills that now top $500 billion, according to studies by Stanford University's Joe Nation, and several of the state's cities, including Stockton in the Central Valley, face the prospect of insolvency.

Executives at Stasis Engineering, a formerly Sonoma, Calif.-based auto design firm that left the state for West Virginia in the midst of an unfolding budget crisis in 2009, told the Press Democrat newspaper that the "budgetary bedlam gripping Sacramento" seemed to portend, as the paper characterized the company's concerns, "a future filled with tax increases and service cuts." More recently, in December 2011, Ron Mittelstaedt, the chief executive of Waste Connections, a recycling company formerly based in Folsom, Calif., told the press that the state's "structural [budget] mess" was a contributing factor in its decision to relocate to Texas.

Meanwhile, Oakland Tribune columnist Daniel Borenstein notes that his city has levied what he calls a "hidden pension tax" on property owners for decades to pay off a municipal pension fund that went bust in 1976. Today, the average Oakland home with an assessed value of $266,267 pays an additional $419 a year in property taxes to finance the benefits of the defunct system, Mr. Borenstein estimates, while a home assessed at $1 million pays an added $1,575 in taxes.

Bigger bills will fall due elsewhere. Earlier this year, the Massachusetts Taxpayers Foundation examined unfunded retiree health-care liabilities in 10 midsize municipalities, including Worcester and Springfield, and found the debt averaged $13,685 per household. To pay those commitments over 30 years would require adding $565 a year to property tax bills on average, the group estimated. In one community, Lawrence, the tab was $1,209 annually, a 50% increase over current taxes.

Back in Illinois, Dana Levenson, Chicago's former chief financial officer, has projected that the average city homeowner paying $3,000 in annual property taxes could see his tax bill rise within five years as much as $1,400. The reason: A 2010 Illinois law requires municipalities to raise the funding levels in their pension systems using property tax revenues but no additional contributions from government employees. The legislation prompted former Chicago Mayor Richard Daley in December to warn residents that the increases might be so high, "you won't be able to sell your house."


Poster Comment:

Looks like Leftardism is about to crash in a big way.... Wonder how many union bosses will go broke over this???? (None..... that's the taxpayers job).....

Post Comment   Private Reply   Ignore Thread  


TopPage UpFull ThreadPage DownBottom/Latest

#1. To: CZ82 (#0)

Don't worry. States are gutting pensions worldwide now.

The US isn't immune.

Besides, Vioxx killed off over 500 000 65+ aged in a 6 year period.

That saved beaucoup bucks...;}

mcgowanjm  posted on  2012-04-30   9:32:13 ET  Reply   Trace   Private Reply  


#2. To: CZ82 (#0)

Jerry Brown is trying to raise taxes in California to pay for lavish retirement benefits for government bureaucrats. of course, he claims that the money is going towards "education". No, it's going to pay for retire school teachers and won't do a damn thing for education.

Most of the private sector has moved away from defined benefit plans to defined contribution plans.

Federal, state and local government must do the same, before the whole country goes belly up from paying people not to work.


Iran’s main drive for acquiring atomic weapons is not for use against Israel but as a deterrent against U.S. intervention -- Major General Zeevi Farkash, head of the Israeli Military Intelligence Directorate

jwpegler  posted on  2012-04-30   10:05:53 ET  Reply   Trace   Private Reply  


TopPage UpFull ThreadPage DownBottom/Latest

[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Mail]  [Sign-in]  [Setup]  [Help]  [Register] 

Please report web page problems, questions and comments to webmaster@libertysflame.com