The Woeful State of the States - Editorial Commentary - Thomas G. Donlan - Barrons.com

The Woeful State of the States - Editorial Commentary - Thomas G. Donlan - Barrons.com:

Interesting facts from the above editorial:

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"New York City police and firefighters are allowed to retire after 20 years of service. The benefits are set by the state, and paid for by the city. The city has more of them on retirement than there are on active duty. Almost half the retired police and firefighters are under age 60, and more than a quarter of police retirees are under age 50...

...According to the Bureau of Labor Statistics, average wages and benefits in state and local government are higher than in the private sector -- $26.24 an hour in government, versus $19.45 an hour in private employment -- even though average cash wages are lower in government than in the private sector.

The difference is in the relatively invisible benefits accrued to government workers. Health benefits cost state and local government an average $4.43 an hour, compared with $2.01 for private employers. State and local governments award their workers an average $3.23 an hour for pensions and savings plans, compared with 94 cents an hour in the private sector...

...California, which was projecting revenues 49% lower than the spending necessary to continue all services and give expected salary and benefit increases.

a large part of state pension benefits are unfunded and uninsured. Consequently, states, most of which also run their localities' retirement plans, have played fast and loose with their pension promises...

...One of the less-noticed causes of the worldwide financial crisis was a desperate search for yield that was led by pension funds and, in turn, by state and local government pension funds."