Shadowbosses: Government Unions Control America and Rob Taxpayers Blind by Mallory Factor Page B

authorized cities, counties, and school districts to negotiate the same deal for their employees. 52
    This is usually the way this works—once one group of government employees gets a benefit, government employee unions demand the same benefit for other groups of workers, even though being a policeman is more demanding and dangerous than being an office worker. And extending the greatest possible benefits to the greatest number of government employees drives up costs exponentially.
    Largely as a result of the “3% at 50” system, California’s pension costs increased
by an astonishing 2,000 percent
from 1999 to 2009. You read that statistic right—it’s a two followed by
three
zeroes.
    There is a basic immorality to this system. It is worth asking yourself how it became your job to pay for somebody else’s generous retirement when you’re having a hard enough time saving for your own.

The Vault Is Empty
    And then the worst problem of all—unfunded pension liabilities. In addition to very high current pension contributions that strap state and local budgets, there is a much worse problem on the horizon. States and municipalities have promised their workers pension and retiree health-care benefits that there is almost no way that the government will be able to pay.
    In addition to very high current pension contributions that strap state and local budgets, there is a much worse problem on the horizon. States and municipalities have promised their workers pension and retiree health-care benefits that there is almost no way that the government will be able to pay.
    Of course, the lightly unionized Free states don’t necessarily have any better policies when it comes to underfunding their future pension and health-care obligations than the highly unionized Union states. But the Union states will have greater future obligations because of bloated union-negotiated pensions and retiree benefits.
    The contributions that governments have made each year to pay for these future pensions are simply not great enough to cover the future costs of these pensions. So, in future years, states will have to make astronomical payments out of their general treasuries to make up for these shortfalls.
    Imagine that instead of saving what you need for retirement, you take half that money that you should put in your retirement account and try your hand at the slot machines. Your plan? Either you will win the jackpot, or your only son will make a whole lot of money and support you in your old age. It is such a good plan that you realize you can cut back your contributions to your retirement account further, and spend even more on the slot machines. The only looming problem is that you haven’t hit the jackpot yet, and you sense your son is having a hard time getting the lucrative job that you are counting on.
    Just like you counting on a jackpot or your son’s future earnings to make up for your retirement savings shortfall, the states are betting that a raging bull market will solve their shortfall problem. If the bull market fails to materialize, though, future taxpayers will have to make up the shortfall.
    Most government employee pensions across the country are underfunded, meaning that in future years, taxpayers will have to make up the shortfall in order to pay out pensions to all those government workers who are counting on receiving them. Government officials have given in to union demands for greater pensions without anyone figuring out how to possibly pay for them. And anyway, future pension obligationsdon’t impact the current budget too much, so why not? After all, these government officials will be retired anyway by the time the bill comes due. By then, it will be somebody else’s problem.
    There are two components of states’ unfunded liabilities, both heavily affected by union-negotiated contracts. The first is the fixed pension amount that retirees have been promised, which we have discussed. The second is the future cost