By Yaël Ossowski | Florida Watchdog
ST. PETERSBURG — Huge gaping holes in public pension funding didn’t arise from the abyss of the recent economic crisis, but instead have been growing larger and larger over time and threaten the budgetary health of every city in the Sunshine State.
The new report reveals that, despite the claims of public-sector unions, the benefits promised to county and city workers over the past few decades lie at the heart of the current pension mess, not the financial tsunami of 2008 which has so far received a majority of the blame along with reform-hungry politicians.
“We see in this report, over time, there are some troubling trends,” said Carol Weissert, director of the Leory Collins Institute at Florida State University, at a news conference in Tallahassee.
The problem of unfunded pension liabilities, according to researchers, is a “problem that has been years in the making,” pointing to a flawed model that has been too generous without asking for more in return.
“Asset values have stayed pretty constant over the past two years but liabilities have continued to climb. We expect that underfunding is further,” said David Matkin, an associate professor of public policy at the institute. “Discussions about structural repairs to municipal pension problems are needed because of long-trend problems.”
“Pensions have been financially viable for 70 years and were on solid financial ground until the stock market crash,” writes the Service Employees International Union on its Fact Check website. “The economic crisis — and the Wall Street excesses and corporate abuses that drove it — has put a secure retirement at risk for everyone.”
SEIU did not have an immediate comment for this story.
“Those that are getting into fiscal challenges, particularly out West, are deciding whether it’s reasonable to continue to (put) increasing (shares) of their (budgets) towards these pension obligations,” said Matkin, referring to the worst case scenarios of California cities San Bernardino, Mammoth Lakes and Stockton.
Stockton was the largest city in the nation’s history to declare bankruptcy in June of this year.
Read more: Florida Watchdog