To avoid bankruptcy for now, the city of Providence, Rhode Island is slashing cost of living raises for city pensioners. In today’s NYT:
The change would save about $16 million in the 2013 fiscal year, the mayor said; cost-of-living increases would be reinstated once the retirement system is 70 percent financed, which could take well over a decade. The change would also apply to current city workers once they retire.
There is not enough money going into the pensions to pay the obligations of retirees. And we aren’t even talking about health care yet.
This will only get worse since many counties and states face the same problem. The Treasurer for the State of Rhode Island appears to be doing something about it. She’s a Democrat and she is taking heat from unions. Talk about standing up the media bias and the pressure of special interests — on behalf of all the people she represents.
But it’s happening in most states and no one — correct me if I am wrong — is talking about this disaster in the 2012 presidential race. The problems below are as bad as the problems up above. And no one can get away with it now. Moody’s is now including all unfunded pension debt when it considers a state’s credit rating.
Some things to think about:
- Consider what might happen to your elderly parents who rely on pensions from states and local municipalities.
- Consider where you want to retire. Here’s a report comparing the states and their liabilities including pensions. Glad I am moving from Massachusetts to North Carolina.
- And watch out for many lawsuits. Employees will go after the governments. And taxpayers will go after past public officials who set up these unfunded promises.
You won’t get this stuff from the mainsteam TV media. Is it another example of media bias? Not really. It’s that TV has a hard time explaining these stories. Plus, there is no hero. You, as the most important journalist in your life, have to do the work. That’s why we read four newspapers each day.