by Charles A. Monagan
Jan 24, 2012
07:38 AMOn Connecticut
Gov. Dannel Malloy recently has made headlines with his efforts to deal with the monstrously underfunded state employees' pension fund. Part of his plan, according to The Connecticut Mirror and other news reports, include paying an extra $3 billion (that's billion, with a "b") over the next eleven years, starting this July with a payment of an "extra" $123 million. This is in addition to the more than $900 million that currently goes into the fund each year, all to support former state workers in their retirement years.
If you do the quick math, that's more than $300 out of the pocket of each of the state's 3 million residents, next year alone—just to fund pensions. That's even before starting to pay current salaries and all the other costs that come with running a state. Amazing.
Of course, while we are glad to see that the governor is finally taking this issue head on, we still have to shake our heads as to why it's taken this long to be addressed.
Two years ago in our February 2010 issue, we ran an in-depth story by Richard Urban called "The Pension Bomb" that detailed the pension fund situation, which has now become among the worst in the nation. Although the numbers have changed a little (and not for the good), the general information in the story still holds true today. Much of this problem has been created over decades by legislators reluctant to deal with the need to increase payments, content instead to just play a fiscal Three-Card Monty by shifting payment schedules around. As such, the pension debt per taxpayer has ballooned exponentially, making paying it down even more daunting.
At the time, Urban wrote:
But solutions are not in the offing at present. With a state budget hundreds of millions in arrears and the prospect of the deficit growing into the billions, the focus in Hartford understandably is elsewhere. Unfunded future obligations are not something legislators and union bosses are inclined to worry about just now. As Scarlett O’Hara said, “I can’t think about that right now. If I do, I’ll go crazy. I’ll think about that tomorrow.”
Clearly, tomorrow has finally come.Still Ticking