Pensions are long-tem debt and voters need a say in assuming that. That is one reform needed to deal with the huge burden government pensions are piling on taxpayers.
Another already underway is a change in how government conducts its business.
As the cost of using government to perform specific public functions increases partly due to pensions, such as the management of parks and zoos, it becomes more efficient to contract with nonprofit organizations to provide management.
This results in one immediate benefit regarding funding.
Tax monies governments use to fund public services are generally obtained coercively and unless a straightforward case can be made for its public utility or fairness of funding (as we are now seeing in the discussion around the faux arena funding tax increase) the public, given the opportunity, will not approve it.
Funding coming from donations is funding given freely towards a cause and from a well-made case that a specific public resource is important to the community and worth supporting.
We see this working here with the Sacramento Zoo and in New York with Central Park, which has built a financial endowment well in excess of $100 million.
Seen from that perspective, the cost of public pensions, while burdensome, is leading to the kind of changes in providing government service that may benefit all of us.
An excerpt.
Dan Walters: Reckoning day coming for pensions
By Dan Walters - Bee ColumnistPublished 12:00 am PDT Monday, October 9, 2006
We'd like to think that those we elect to public office are motivated solely by the long-term betterment of their constituents' lives, but if we've learned anything about politics, it is that it is, at best, a short-term business.
Just as corporate executives live or die by how investors view their annual profit-and-loss statements, politicians are driven by how action plays with interest groups and voters in anticipation of the next election.
We have seen any number of corporate scandals -- Enron, for example -- that involved efforts to mislead the investing public about a company's true fiscal condition. Generally, however, political figures have been given a pass when they play Enron-like games with public money by hiding liabilities and inflating assets.
San Diego city officials might have skated when they played games with the city pension fund, deliberately underfunding it after granting big benefit increases. However, they not only misled the public, but hid the fund's condition in paperwork to market city bonds, and that's illegal.
San Diego's mayor was driven to resignation by the scandal, and eight former officials face criminal charges for the cover-up of what turns out to be a $1.43 billion long-term deficit in the pension fund. To restore public confidence, city leaders are proposing a ballot measure that would require all future pension increases for city workers to be ratified by voters -- a provision that San Francisco has had for many years.
Court decisions have declared, in effect, that once granted, pension benefits to public employees cannot be abrogated. Fiscally, therefore, they have the same long-term effects as any other debt. We require voter approval of general obligation debt, so it's not outlandish that obligations for pensions face the same hurdle.
