To continue putting N. C.’s pension challenges in perspective, as you said, we’re not as bad off as China. According to a Moody’s report on the 10 worst pension funds in the U.S., we’re not as bad off as some other states either.
As Hood points out,
For some states and localities, the pension crisis has already arrived. They are now spending an exorbitant share of their annual budgets paying retirees for past services rendered rather than paying employees for current services.
The 10 states with the worst-off pension plans (with political party in charge right now) are:
- California – Democratic governor; Democratic Legislature
- Illinois – Democratic governor; Democratic General Assembly
- Rhode Island – Democratic governor; Democratic General Assembly
- New Hampshire – Democratic governor; Republican General Court
- West Virginia – Democratic governor; Democratic Legislature
- Kentucky – Democratic governor; Democratic State House, Republican Senate
- Oklahoma – Republican governor; Republican Legislature
- Kansas – Republican governor; Republican Legislature
- Louisiana – Republican governor; Democratic Legislature
- Connecticut – Republican governor; Democratic General Assembly
Of course, state pension funds didn’t get in trouble overnight and various decision makers have contributed to the problem over many years. Whatever political party is in charge, the pension fund problem is well, a real problem that will have to be dealt with.
North Carolina isn’t there yet… In our state, the probable result will be to add somewhere between $12 billion and $30 billion to our government’s fiscal liabilities. Will our next governor and legislature respond by raising taxes by $500 million or more a year to build up future reserves? Will they slash benefits for future workers?
They’ll have to do something.
Just another reminder that there is a lot riding on the elections in November.