Public Pension Problems

The Manhattan Institute’s Steven Malanga has an eye-opening WSJ op-ed on the depth of the looming fiscal dsiasters some states face due to public pensions.  As he describes it, the gulf between those states that have been (relatively) responsible and those that have not is huge.  For instance, Malanga reports, “Indiana’s debt for unfunded retiree health-care benefits, for example, amounts to just $81 per person. Neighboring Illinois’s accumulated obligations for the same benefit average $3,399 per person.”  As much as I love Chicago, I’m not sure I’d want to live there right now:

Dana Levenson, Chicago’s former chief financial officer, has projected that the average city homeowner paying $3,000 in annual property taxes could see his tax bill rise within five years as much as $1,400. The reason: A 2010 Illinois law requires municipalities to raise the funding levels in their pension systems using property tax revenues but no additional contributions from government employees. The legislation prompted former Chicago Mayor Richard Daley in December to warn residents that the increases might be so high, “you won’t be able to sell your house.”