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20 years



States are now ready to end collective
bargaining rights for public sector unions
and kill their sweetheart retirement deals.

On Christmas Eve, 2009 then California Gov. Arnold Schwarzenegger was preparing a Christmas present for the American people—the tab for an $8 billion handout from the American taxpayers. Facing a budget deficit of over $20 billion for fiscal year 2009, a week earlier Schwarzenegger asked the Obama Administration for an $8 billion handout on top of $7 billion in State grants it had just received. Schwarzenegger informed the White House that, without additional stimulus funds, he would be forced to severely cut back, if not eliminate, CalWORKS, the State's primary welfare program, as well as California's In-Home Health Care Services program for the disabled and the elderly—and two massive tax breaks for large corporations in the State that had been recently approved by the cash-strapped California State legislature. California has subsisted for the last couple of years by borrowing from anticipated lottery earnings.

Last year, 10 States were facing bankruptcy: Arizona, California, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin. More States are coming.Ohio, which has not declared insolvency, is $23 billion in the hole and counting. Add to those potential mega-financial disasters caused by social progressive mismanagement, several major cities are also drowning in red ink. Many of them are also threatened with bankruptcy if the taxpayers of the United States don't dig into their already empty pockets and fill their municipal tin cups. Nevada is facing the worst 2012 budget shortfalls of 45.2%. Illinois is second with a shortfall of 44.9%, followed by New Jersey at 37.4% and California at 29.3%.

This year, 17 cities have joined them. What do all of the cities have in common? They are all social progressive, far left liberal-controlled cities who believe as long as the taxpayers have pockets there is no end to the revenue stream they can tap: Central Falls, RI; Chicago, IL; Detroit, MI; Hamtramck, MI; Honolulu, HI; Joliet, IL; Los Angeles, CA; Newark, NJ; New York, NY; Paterson, NJ; San Diego, CA; Reading, PA; San Francisco, CA; and Washington, DC. Many of the cities facing pension bills they can't afford are shifting dollars from vital municipal services to cover the pension checks that must be mailed. In 2002, Los Angeles' taxpayers contributed just under $100 million to the city's retirement system. The tax contributions funded the pension system for the year without a deficit. In 2010, the taxpayers contributed over $400 million. The system is now underfunded by more than $2.3 billion. What happened? The unthinkable. Baby-boomer city employees with sweetheart retirement packages began to retire, and the nightmare everyone knew would happen sometime in the unforeseeable future became the present. The Day of Reckoning had come to the social progressives who climbed into bed with the labor unions. And even now, the social progressives who are drowing in red ink see nothing wrong with demanding that the taxpayers in other States foot the bill for their fiscal follies.

Most of the cities and States facing bankruptcy are broke for two reasons. First, social progressives believe their own rhetoric that America is the land of so much plenty that we can afford to freely share the same measure of prosperity we earned through our sweat equity investment in our community, in our State, in this nation of citizen equals with those who are not here legally and who have contributed nothing to earn what they expect to be given to them.

Add to that the fiscal problems in the various cities, counties and States that have resulted from quid pro quos from elected officials who climbed into bed with the public sector union officials in order to get union endorsements or campaign support. Too late those cities and States have discovered just how costly the price tag for that support was. With unions negotiating retirement "packages" for public service employees, many metropolitan public service employees from city managers to police officers are retiring with incomes based on 60% to 100% of the incomes they earned during their last year of employment rather than their average lifetime earnings in that job. Knowing they were leaving the workforce, the employees have managed to added tons of overtime hours in order to beef up their retirement paycheck.

The State of California is bankrupt today largely because of this type of abuse. Yet, the left-controlled State legislature refuses to fix the problem by taking on the public sector unions in the State. On Nov. 9, 2009, a proposed law, the California New Public Employee Benefits Reform Act of 2010 which would have changed the rules under which new State employees, hired after July 1, 2011, would qualify for pension benefits, was offered to the California Attorney General by Keith Richman, the founder of the California Foundation for Fiscal Responsibility [CFFR] and a former member of the California General Assembly. Richman and Marcia Fritz, the president of CFFR had hoped a mystery donor would contribute the $2 million needed to put the Public Employee Benefits Reform Act on the ballot as a referendum or as an amendment to the State constitution, but no financial angel stepped forward. In a media interview Fritz emphasized the importance of changing how public officials qualify for enhanced pensions in the State. "You've got public safety workers retiring after 24 years of service, retired in six-figure pensions for 35 t0 40 years. We can't sustain it. It's not affordable." On Jan. 14, 2010, the initiative was given an official ballot title and cleared for circulation. But, it never ended up on the ballot in November, and the California red ink is spewing across the State like a tsunami.

On Jan. 18, 2011, Fritz wrote an op ed piece in the Los Angeles Times that began: "Since Christmas, we've learned that San Francisco's retiree health plan is $4.4 billion in the red, that Santa Clara County's fire chief will collect a hefty government paycheck on top of his $200 thousand annual government pension, and that the University of California's latest tuition increase will go mostly to pension debt even as UC's highest-paid executives are threatening to sue for more benefits. Retirement scandals are as common as weather reports, and voters are fed up...With the unfunded pension liabilities of California's state and local governments exceeding $700 billion, some state leaders now admit we can't fix our budgets without reducing public employee retirement benefits." But, asking Governor Moonbeam (Jerry Brown [D-CA]) to fix the social progressive nightmares in Sodom on the Pacific is like asking AFL-CIO president Richard Trumpka to reduce the benefits package for all union officials in the umbrella unions shielded by the clout of the nation's most powerful union.

In California, the average state retirement package is now valued at $1.2 million. The California taxpayers who foot the bill for the retiring bureaucrats to live in luxury retire with a benefits package that averages $60 thousand—largely grown from their own savings. Since when did it become my responsibility, and the responsibility of my private sector neighbors throughout America to provide public sector people in other States, who have never done anything for us, with a retirement income?

Solving this crisis, Fritz noted, means cities and States need to make tough choices. But those tough choices do not include expecting people in other States to bail them out. The first thing they have to do is remove public sector unions from the equation. The world can no longer afford them. Over a dozen States and scores of cities are now struggling to find solutions to growing retirement costs negotiated between Democratic politicians indebted to unions and the unions who elected them. It's obvious that before the problem can be solved the source of the problem—the public sector unions—need to be removed from the equation. As long as unions represent government employees, unions must be barred from contributing money to politicians or supporting political candidates with any form of sweat equity assistance that could trigger any form of quid pro quo for that support.

Oh, and by the way—in closing. If I was Gov. Scott Walker [R-WI] and had 14 truant State Senators holed up in the Clocktower Inn in Rockford, IL or some fancy digs in Chicago, there is one things I'd do to end the Wisconsin legislative stand-off. Since Walker only needs one Democrat in the State Senate to have a quorum, he should make the GOP Senators draw straws. Unless there is a volunteer, the short straw switches parties. Once sworn in, he or she becomes the quorum Democrat. With a Democrat in the building, the Senate can vote on the measure to strip the public employees union of collective bargaining rights in the State. There is already a recall effort on the two State Senators who orchestrated the legislative flight into Illinois.

By the way, the cities and States who are begging the federal government for a handout to balance their budgets are violating the Constitution of the United States. As much as the social progressives in Washington love to give our money out to just about anyone, Article I, Section 2 of the Constitution prohibits the "unbridled dole." Tax dollars spent must be uniformly apportioned among all of the States. Politicians can't arbitrarily gift pet States with gratuities—which is why "earmarks" are also unconstitutional—since they disproportionately allocate tax dollars based on political whim and not population.


Just Say No
Copyright 2011 • Jon Christian Ryter.
All rights reserved