Public employees and their unions have the nation’s taxpayers – and, ironically, themselves – teed up for long drive into the rough and there may be no recovery if cities, counties, and states don’t take dramatic action soon.
You’ve likely heard about “unfunded pension liabilities” that are beginning to cause cities to seek Chapter 9 Bankruptcy filings. Detroit was the largest city to seek such refuge, but dozens if not hundreds of cities, and a couple of states, may not be far behind. The reason, public employee pensions, is just part of the problem. The real problem is that governmental units are not transparent in their pension cost reporting, and they’re not required to follow the same reporting rules as private sector pensions.