Unfunded pension liabilities are
the root of the financial problems facing virtually every level of government
today. The US Postal Service, for example, would be solvent today if it were
not for pension obligations. A number of cities are approaching bankruptcy
because of pension liabilities.
Stockton, California is already in bankruptcy, and the Governor of
Michigan has just put the city of Detroit under an emergency manager.
My own state of Connecticut is
facing a billion dollar deficit in the next fiscal year and the governor is
desperately trying to seek new revenues after his recent massive tax hike
failed to produce the needed revenue. Closer to home the town of Fairfield has
recently been presented with a proposed budget increase of over 6.5%, much of
it due to town pension obligations.
The Yankee Institute for Public
Policy has recently reported that 1223 Connecticut state employees currently
make more than Governor Dannell Malloy’s salary of $150000 per year. Topping
the list in 2012 was UCONN’s legendary basketball coach Jim Calhoun who made
$2,865,769. Geno Auriemma, the women’s basketball coach, was second on the list
at $1,829,052. At the bottom of the top ten was Warde Manuel, UCONN’s Athletic
director who made a paltry $551,305.
Doctors at the UCONN medical
center made up the balance of the top ten list. For example, Hilary Onyluke,
the Chief of the division of Neurosurgery made $1,030,000, and John Nulsun, The
Director of the Center for Reproductive Services, made $917,000.
I do not want to question or
criticize the salaries paid to these employees while they perform their
valuable jobs, but I think it is about time that the State of Connecticut
consider why the people of Connecticut have to provide these employees with
pensions after they retire.
The Yankee Institute reported that
in 2102 more than 7700 state employees made more than $100000 per year while
the average median household income in Connecticut was about $66000 per year. The Yankee Institute noted that half of
the individuals making more than $150000 are associated with the University of
Connecticut or its health center. Has anyone ever considered why people who make less than the median income should have to provide pensions for a minority who make two or three times that amount?
Pensions were originally created
to provide retirement income for state and municipal employees who were
traditionally underpaid and who would not be ale to save for their own
retirement. This is no longer the case as state and municipal employees have
become a kind of new aristocracy with wage, benefit, and pension packages
negotiated by powerful public service unions. Most residents of the State of
Connecticut do not have anywhere near these benefits but still politicians demand that they fund the
benefits of the new aristocracy.
Politicians never talk about the fact that
most people in the private sector have great difficulty in funding their own
retirement accounts. they only talk about unfunded public pensions. One of the causes of the French Revolution was the inequity in French society. Peasants paid taxes while aristocrats were exempt. Click here for an amusing but sad video on the California Pension aristocracy, or just view the video below. ###
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