Way too many Americans know about this ongoing scandal — an enormous burden on taxpayers. It’s not a problem of “underfunding,” not by a long shot. The problem is over-promising to an extreme so bad it’s really just legalized theft. You can read about on example of why this goes on over at National Review: “Regardless of New Jersey’s Budget Insolvency, Politicians Can’t Oppose Teachers’ Unions.” But it’s not just New Jersey — as you can read about here at The Daily Signal:
That’s how much a recent report from the American Legislative Exchange Council, or ALEC, estimates state and local governments across the U.S. have promised to their employees, but can’t afford to pay.
Normally, if an employer promises its workers more than it can pay, its workers lose out, but that’s unlikely to be the case here.
Since most state and local pension promises represent legal obligations, it will be state and local taxpayers who bear the burden of their governments’ unfunded promises.
According to the report, state and local governments as a whole have set aside only 35 cents for every dollar of pension promises. Their $5.6 trillion of unfunded pension liabilities works out to $17,427 for every man, woman, and child in America (or about $70,000 for a family of four).
Alaska tops the list in unfunded liability per capita with $42,950 while Tennessee has the lowest at $7,246. Overall, only five states have per capita unfunded liabilities under $10,000 while 15 states exceed $20,000 per capita. That’s a high price to pay for state and local government’s failure to properly administer their employees’ pension funds.
Not only do state and local pensions have massive unfunded liabilities, but those unfunded liabilities are growing at breakneck speed. Since ALEC’s last report two years ago, state and local pensions’ unfunded liabilities increased by $900 billion. That’s equivalent to a 9 percent annual growth rate, or an additional $1,400 per year for every man, woman, and child in America.
Read more: The Daily Signal
Image credit: Andrey_Popov / Shutterstock.