Avoiding the issues

Nevada lawmakers complain all the time that the Silver State is last among the 50 states in everything.

They're right in at least one regard: Nevada's political establishment is bringing up the rear when it comes to tackling the crippling fiscal burden of the state's exorbitant public employee retirement benefits.

All across America, governors and legislators are publicly acknowledging that governments don't have the money to pay all the pension benefits they've promised to current retirees and public employees. From New Jersey to Arizona, The New York Times reported Monday, states are working urgently to address billions of dollars in unfunded liabilities and keep pension plans solvent.

R. Eden Martin, president of the Commercial Club of Chicago, a business group that has been warning of the coming public pension collapse for years, and Joshua D. Rauh, a finance professor at Northwestern University, told the newspaper that many state pension funds will run out of money this decade without drastic changes. Mr. Rauh pointed out that Illinois is in such deep financial trouble it likely will require a federal bailout -- otherwise, the state might soon have to spend up to half of its general fund revenues on retiree benefits, gutting services in the process.

So Illinois has mandated that future hires won't be able to retire before age 67. Other states have reined in benefits and imposed new costs for future hires as well.

Colorado is using a much bolder approach, taking advantage of a 1961 state Supreme Court ruling that allows pension cuts for current workers if it's "actuarially necessary." Colorado is trying to cut benefits for current retirees as well -- something private-sector workers are all too familiar with. (In response, Colorado retirees are suing, The Times reports.)

Colorado, Illinois and other states are taking such action not just because it's needed, but because they have the political will to do so.

That will does not exist in the Democrat-controlled Nevada Legislature. Yes, lawmakers made slight tweaks to the benefits of future state hires during the 2009 session (ensuring the passage of massive tax hikes), requiring a few additional years of service for full retirement benefits, but those changes did very little to reduce Nevada's unfunded retirement liabilities, which top $10 billion -- a figure three times the state's annual operating expenses.

The only sane option for Nevada is to eliminate the defined-benefit pension and retirement health care subsidies for all future public-sector hires.

Waiting until the state's pension fund goes broke -- and it will, eventually -- is no way to approach this looming economic disaster.