S&P Rating Services announced it was removing its stable outlook on the economic health of Kentucky to a negative outlook, based upon over $33 billion in unfunded liabilities when combining all the government retirement systems together.
S&P credit analyst John Sugden said in a statement, “The outlook revision reflects our concern over pension funded levels, which have declined and are likely to continue declining due to lower-than-actuarially required funding of pension liabilities and budgetary pressures associated with funding post-retirement benefits."
Seeing the possibility of government officials trying to pass off the cost of the unfunded liabilities on business and workers of Kentucky, Dave Adkisson, president of the Kentucky Chamber of Commerce, said this at a press conference:
“If the 2013 session concludes without the passage of meaningful pension reform, I don’t see how the business community would have any choice but to call the 2013 session a failure.”
“Kentucky’s businesses have a significant stake in our public employee pension systems — both at a state and local level,” Adkisson added. “Kentucky’s private employers, most of which are small, local businesses, directly contribute approximately 40 percent of all state revenue in income, corporate and sales taxes, in addition to individual income, payroll and sales taxes.”
Kentucky taxpayers and workers in the productive private sector shouldn't take any of this, as the idea of raising taxes to pay for over-paid government workers and their unsustainable promises of above-market compensation the rest of us aren't provided, is outrageous.
Why should we have to pay any more for this out-of-control, larger government expenditures.
The only answer is to cut back on pay and benefits of government workers and make them pay more out of their own pockets for what they get.
Already the measures being put forth are only band aides made to look like lawmakers are doing something. In reality, they are simply kicking the can down the road again; a road that is getting much shorter.
What is it about Kentucky politicians that make them not understand that the days of big government and overpaid state workers is over? It is. It's unsustainable, and the people of Kentucky aren't going to have the weight of more taxes forced upon them because of paying out wages and benefits the rest of the private and far more productive sector don't come close to getting.
Showing posts with label Unfunded Liabilities. Show all posts
Showing posts with label Unfunded Liabilities. Show all posts
February 1, 2013
January 31, 2013
Proposed Ky Public Pension Changes Nowhere Near Enough
The changes being put forth by Kentucky Senate Republicans, based largely upon recommendations of a task force, don't even begin to deal with the issue, as we see the problem being kicked down the road yet again.
While there are some good things in Senate Bill 2, such as cutting some of the retirement benefits and eliminating an existing law that requires cost-of-living increases, it does nothing to deal with the real problem, which is the unfunded liabilities.
The Kentucky Retirement Systems requirements stand at $11 billion, with only 44 percent of that available to meet the needs.
Didn't Kentucky get the memo from Wisconsin Governor Scott Walker? His simple answer to the challenge in his state was to have the actual people receiving the benefits pay a little more into them rather than the taxpayers. It worked extremely well, as Wisconsin quickly recovered from the weight of having to underwrite the outrageous wages and benefits public workers get over the more productive workers in the private sector.
Not only that, but the language in SB 2 says that Kentucky must totally fund its contribution starting in 2014. That means the Commonwealth must come up with $327 billion for fiscal year 2015. After that the required amount would increase by hundreds of millions of dollars.
As I said, absolutely nothing is being done to address the real issue, which is government workers were given more benefits than can be paid for, and now it has brought the state and the rest of us to the brink of insolvency. Call it what you want, but that's exactly what it is.
Why haven't the lawmakers of Kentucky - both Republican and Democrat - dealt with the issue? They are hoping they can kick the can far enough down the road so they don't have to deal with the outcome of the hard steps that need to be taken to deal with this disaster.
Senate leaders said they would have preferred to see more changes in the government worker pension system, but don't believe the bill would have passed if they didn't work along the guidelines suggested by the task force.
That's incredibly stupid by the Republican-led Kentucky Senate, as they should have put forth a comprehensive bill that would have radically dealt with the problem in a way that would have actually solved it. If that would have been done, it would have been on the Democrats when the house of cards comes tumbling down after they voted against the changes.
As it is, reality will deal with the pensions of government workers in Kentucky because there simply isn't enough money to pay for it, and there will be drastic austerity measures put in place sooner or later. It should have been now, as it would have helped to ease the transition for those counting on the promised benefits. Unfortunately, when the hundreds of million of dollars are needed in the future, nothing being offered as change will do anything to provide for it.
One thing for sure, Kentucky politicians better not even thing of boosting taxes on the productive private sector and free market in order to pay for the outrageous promises they made to government workers, promises that are now being exposed as the fool's gold they were.
While there are some good things in Senate Bill 2, such as cutting some of the retirement benefits and eliminating an existing law that requires cost-of-living increases, it does nothing to deal with the real problem, which is the unfunded liabilities.
The Kentucky Retirement Systems requirements stand at $11 billion, with only 44 percent of that available to meet the needs.
Didn't Kentucky get the memo from Wisconsin Governor Scott Walker? His simple answer to the challenge in his state was to have the actual people receiving the benefits pay a little more into them rather than the taxpayers. It worked extremely well, as Wisconsin quickly recovered from the weight of having to underwrite the outrageous wages and benefits public workers get over the more productive workers in the private sector.
Not only that, but the language in SB 2 says that Kentucky must totally fund its contribution starting in 2014. That means the Commonwealth must come up with $327 billion for fiscal year 2015. After that the required amount would increase by hundreds of millions of dollars.
As I said, absolutely nothing is being done to address the real issue, which is government workers were given more benefits than can be paid for, and now it has brought the state and the rest of us to the brink of insolvency. Call it what you want, but that's exactly what it is.
Why haven't the lawmakers of Kentucky - both Republican and Democrat - dealt with the issue? They are hoping they can kick the can far enough down the road so they don't have to deal with the outcome of the hard steps that need to be taken to deal with this disaster.
Senate leaders said they would have preferred to see more changes in the government worker pension system, but don't believe the bill would have passed if they didn't work along the guidelines suggested by the task force.
That's incredibly stupid by the Republican-led Kentucky Senate, as they should have put forth a comprehensive bill that would have radically dealt with the problem in a way that would have actually solved it. If that would have been done, it would have been on the Democrats when the house of cards comes tumbling down after they voted against the changes.
As it is, reality will deal with the pensions of government workers in Kentucky because there simply isn't enough money to pay for it, and there will be drastic austerity measures put in place sooner or later. It should have been now, as it would have helped to ease the transition for those counting on the promised benefits. Unfortunately, when the hundreds of million of dollars are needed in the future, nothing being offered as change will do anything to provide for it.
One thing for sure, Kentucky politicians better not even thing of boosting taxes on the productive private sector and free market in order to pay for the outrageous promises they made to government workers, promises that are now being exposed as the fool's gold they were.
January 28, 2013
Kentucky Public Retirees Unfunded Liabilities Surpass $18 Billion
Unfunded liabilities for the Kentucky Retirement Systems is now over $18 billion, and shows no signs of coming down any time soon, worsening annually.
While the attempt to make this look like something that can be solved without concessions by those with pensions in the KRS, it's highly unlikely it can happen without that, and Kentucky should follow in the steps of Wisconsin, which with a law which had public employees of that state pay in a very small amount. That quickly moved the state into the black as to its budget, showing the way this type of problem must be solved.
The problem goes back a long way, one in which, as with most government employees, more is promised than can be sustainable over a period of time, as evidenced by the baby boomers entering their retirement age. Younger people can't pay for the outrageous perks, so the unfunded liabilities continue to mount, with few lawmakers in Kentucky willing to make the tough decisions that must be made.
Not only that, but there appears to be no will to cut back on spending, which is the answer to the problem, while making KRS retirees more responsible for their own pension fund, not the taxpayers of Kentucky.
The problem is, as mentioned, is that benefits beyond the market were promised by the government, and now that it's time to pay them out as more and more employees retire, the taxpayers can't and won't support that for which they don't come close to getting in their own benefit packages.
Why should productive, private citizens pay for promises that shouldn't have ever been made, and for which they are hurt even more if taxes are increased to pay for those irresponsible lawmakers who in the past allowed them to be made?
While the attempt to make this look like something that can be solved without concessions by those with pensions in the KRS, it's highly unlikely it can happen without that, and Kentucky should follow in the steps of Wisconsin, which with a law which had public employees of that state pay in a very small amount. That quickly moved the state into the black as to its budget, showing the way this type of problem must be solved.
The problem goes back a long way, one in which, as with most government employees, more is promised than can be sustainable over a period of time, as evidenced by the baby boomers entering their retirement age. Younger people can't pay for the outrageous perks, so the unfunded liabilities continue to mount, with few lawmakers in Kentucky willing to make the tough decisions that must be made.
Not only that, but there appears to be no will to cut back on spending, which is the answer to the problem, while making KRS retirees more responsible for their own pension fund, not the taxpayers of Kentucky.
The problem is, as mentioned, is that benefits beyond the market were promised by the government, and now that it's time to pay them out as more and more employees retire, the taxpayers can't and won't support that for which they don't come close to getting in their own benefit packages.
Why should productive, private citizens pay for promises that shouldn't have ever been made, and for which they are hurt even more if taxes are increased to pay for those irresponsible lawmakers who in the past allowed them to be made?
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