Co-authored with Bill Zettler

There has been much talk regarding the unsustainable fiscal mess most states are mired in.  Some are even discussing the creation of legislation that will allow states to declare bankruptcy.  The largest component of the mess is the unsustainable pensions for public sector employees.  If a contest were held to select the poster child for the pension debacle, Illinois would win hands down.

Today, Illinois’ unfunded pension liability is estimated to be $78 billion. How did we get here?  Let’s call it the “Four Rules of Too” for public employees whose salaries are too high; contributions are too low; plans are too bloated; and retirement is too early.  As the following chart regarding the Teachers Retirement System (TRS) shows, over the last decade teacher salaries have risen by 7% per year or 96% compounded and the pension cost (Pension Benefit Obligation) taxpayers are responsible for has gone up 116%.

If we look at the rest of us who are locked into the Social Security system, our salaries increased by an average of 3.65% or 43% compounded, less than one half of the teachers’ increases. Thus although our income has gone up less than half as fast as teacher salaries and pensions, we have had to pay more taxes out of our lesser incomes to fund the promises made by union bosses and politicians.  This model could be applied to other state workers as well.  For instance, 35% of Illinois State Troopers make more than $100,000 per year with top salaries of $185,000.

And the future doesn’t look any brighter.

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An interesting document found its way to my inbox last weekend. It was a PowerPoint presentation of an analysis done by the New Jersey Education Association, regarding its efforts to re-elect Democratic Gov. Jon Corzine.

The document can be found at NEAexposed.com.

Citing “Electile Dysfunction,” meaning the polls were telling them that voters, including teachers, weren’t as enthusiastic about Corzine as they would like, the union’s Director of Government Relations, Ginger Gold Schnitzer, proposed a double-dose remedy: “A robust member-to-member campaign,” followed by “an independent communications campaign to inoculate the public.”

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