Insolvency: America’s states, counties, cities and municipalities are in deep trouble, owing literally trillions in public employee pensions that they can’t pay off. Nowhere is that more apparent than in California, the nation’s poster boy for fiscal irresponsibility.
In an excellent piece in the Los Angeles Times, Jack Dolan describes how California’s then-Gov. Gray Davis in 1999, “with the stroke of a pen … signed legislation that gave prison guards, park rangers, Cal state (California State University System) professors and other state employees the kind of retirement security normally reserved for the wealthy.”
Dolan notes that, as a result, more than 200,000 public workers were made eligible to retire at 55. In the case of the state’s famous Highway Patrol, officers could retire at 50 with up to 90% of their highest pay. California’s public employee unions, which through lobbying and campaign spending effectively gained a stranglehold on the state government, were simply too powerful to defeat.
Of course, citizens were told that the lavish new benefits wouldn’t cost a dime; they’d pay for themselves with stellar returns on their investments. Remember, this was 1999, the year the worst market crash since 1929 began.
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