Wednesday, August 10, 2011

Public Pensions & Parks Funding

A very generous supply of money for the former has reduced the funds from which the latter could be funded, as this article (California is examined) from City Journal reveals.

An excerpt.

“Recent polls show that public opinion is turning against government workers because of their rich pay and benefits—especially pension benefits. A spring poll conducted by the Los Angeles Times and the University of Southern California, to take one example, found that 70 percent of Californians favored a cap on public employees’ pensions because of the widespread perception that pension costs have become a crushing burden to state and local governments (see “The Compensation Monster Devouring Cities”). Faced with this declining support, unions have counterattacked by claiming that government pensions are actually quite modest. They argue, for instance, that the average annual pension of a state worker is under $30,000 in California and even less in New Jersey and New York. But their figures are misleading: the real size of pensions for those retiring now on full benefits is much larger.

“Consider California. Earlier this year, state treasurer Bill Lockyer, a Democrat who has received union backing in his political campaigns, claimed that the average retired state worker in California was getting just $2,500 a month in benefits. When Contra Costa Times columnist Daniel Borenstein investigated, he found that Lockyer’s average included people who had worked for the state for as little as five years and were collecting partial benefits, as well as those who had retired years before the state significantly enhanced pension benefits in 1999.

“But if you limit the average to currently retiring workers who have spent more time working for California and thus can retire with full benefits, a different picture emerges, Borenstein found. The average state worker retiring in 2009 with full benefits received a pension of nearly $67,000 a year. Local government workers in California did even better. Looking at his own town, Contra Costa, Borenstein found an average pension for new retirees of $85,500 annually. There’s more: though government workers don’t automatically qualify for Social Security, about 65 percent of the retired government employees who are members of CalPERS, the state’s government-employee pension system, do get Social Security benefits because the state has made contributions for them for years. The average benefit comes to $19,000 a year. So sweet are California’s pension deals that a report by the state’s Little Hoover Commission, a government watchdog agency, estimated that the average government worker retiring with full benefits and Social Security will get 109 percent of his final working salary as a pension.”