The ticking time bomb is public employee pension benefits

In late December in this space I offered a perspective on immovable public employee unions facing an irrestible budget crunch in Southern Nevada. In it I mentioned an article in Reason magazine by Steven Greenhut titled "Class War: How public servants became our masters." Greenhut is a former Orange County Register columnist and and now director of the Pacific Research Institute's Journalism Center.

At the time the article was available only in print, but now the magazine has posted it on its Web site.

Much of the current budget debate is over salaries of public employee unions and Greenhut discusses that. But like many others, he also reports on the ticking time bomb that will go off in a matter of years, creating a huge budget crisis: pensions.

For example, Greenhut writes: "Public pensions have swollen to unrecognizable proportions during the last decade. In June 2005, BusinessWeek reported that 'more than 14 million public servants and 6 million retirees are owed $2.37 trillion by more than 2,000 different states, cities and agencies,' numbers that have risen since then. State and local pension payouts, the magazine found, had increased 50 percent in just five years.

"These huge pension increases have eaten away at public finances, most spectacularly in California, where a bipartisan bill that passed virtually without debate unleashed the odious '3 percent at 50' retirement plan in 1999. Under this plan, at age 50 many categories of public employees are eligible for 3 percent of their final year’s pay multiplied by the number of years they’ve worked. So if a police officer starts working at age 20, he can retire at 50 with 90 percent of his final salary until he dies, and then his spouse receives that money for the rest of her life. Even during the economic crisis, '3 percent at 50' and the forces behind it have only become more entrenched."

That's 90 percent of what is commonly a six-digit salary, and many go on to use their public employee resume to acquire a full-time government job in another jurisdiction.

And those pensions are vested. It is a property right that can't be taken away under current law, which is determined by judges, who are public employees with pension rights. Conflict of interest?

How's that Social Security working out for you? We have a two-caste system. Which one are you in?