"A promise to pay a retiree's health care coverage is essentially a kind of defined benefit plan, in which government pledges to cover a certain percentage of the cost of health insurance regardless of how much money it has actually set aside for this benefit. As the State Budget Task Force's recent report on California explains, right now workers covered in California by this retirement benefit are earning credits that should be financed to the tune of $4.7 billion a year, if California is going to have enough money to pay off this obligation over the years.

But instead of pre-funding the benefit, California has chosen to pay for it on a pay-as-you-go basis, taking the cash for the health insurance premiums of retirees right out of its annual budget. Right now that's only costing the state $1.7 billion annually because of the limited number of retirees who qualify for the benefit. But over time more and more workers will qualify, and those workers will live on average decades in retirement, swelling the rolls of those whom California must provide health coverage for."

Where in the present distressed economy are there new corporate employment contacts that include defined benefit plans? The old name is a pension. In the corporate world, IRAs and 401 K are common. The dinosaur companies that accepted union contracts with future defined benefit obligations are out of business, either escaped offshore or are hanging on by their fingernails.

Why should government employees have a privileged position, when the realities of further municipal bankruptcies are growing daily? It seems that Governor Brown forgets his own rhetoric.

Populism, Progressives and Public Unions cites a quotation from the current California governor.

"Several unions have agreed to larger employee contributions for their members. Taxpayers are living with cuts and making sacrifices to deal with the reality of California's budget crisis, state workers are going to have to do the same." Jerry Brown

Another quote referenced in a Public Employee Unions Guarantee National Bankruptcy article, also confronts the unrealistic mindset that exists in "The Golden State". Someone needs to explain to public officials that the state has used up their precious metal riches and their union members are not willing to do the hard labor of mining new veins of revenue benefit reductions that will balance their budgets.

"The Assembly Public Safety Committee today is considering one of the most noxious, special-interest pieces of legislation we’ve seen in a while—one that will endanger public safety, tread on the California constitution and reinforce the perception that some government workers are part of a special, coddled group that’s exempt from the normal legal and ethical standards that are applied to other Californians." The Registry

In this same BATR essay the Steven Greenhut’s critique in the WSJ, Public Employee Unions Are Sinking California, is emphasized. California legislators inhabit the same psychotropic mental escapism, exemplified with the double dippers that create the public employee entitlement culture. Financial reality never hits the retirement paychecks of the civil service sector, while the tormented taxpayer is told they must pay more.

The rush to leave the state has Californians perplexed for solutions as long as the Sacramento progressive ‘pols’ refuse to challenge the public union mafia. Those who remain will bear an even higher tax burden to feather the nests of the most unproductive elements in society, namely government.

Governor Brown preaches. "And everyone is going to have to realize that building roads is important, investing in schools is important, paying for the national defense is important, biomedical research is important, the space program is an indicator of the world leader - all that takes money". Just maybe a bankrupt state and municipalities needs to reduce the size and scope of government itself.

    

"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."