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A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

nytimes.com

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Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#181

Post by cma »

mythrwy wrote: post #176
cma wrote: post #81

Earlier quoted context omitted.

> So maybe ~13K per tax paying person in outstanding pension obligations alone? Then that would be an obligation of about $300 per tax paying worker per year over their working lifetime. The average yearly salary in Oregon is $50,000. The article makes it out through anecdote that this is why they didn't have gas to send trucks out for a road repair. In the last 20 years Oregon has had near 1% per year population gro…

If the average person makes 50K a year then the average person in Oregon takes home about 35K per year. So you say it's "only" 300 extra dollars a year they have to pay. In other words, this person now owes nearly 1% of their disposable income for life to cover _currently_ unfunded pensions with no corresponding increase in goods or service levels. To put it another way, this person will work ~1/3 of a year out of th…

Why would you look at their after tax income when this comes out of their taxes? (But I can't remember the deductibility rules under the new tax code, maybe they can't deduct state tax payments from federal now).

(Also, I made a mistake, that number was household income)

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#182

Post by mythrwy »

cma wrote: post #181
mythrwy wrote: post #176

Earlier quoted context omitted.

If the average person makes 50K a year then the average person in Oregon takes home about 35K per year. So you say it's "only" 300 extra dollars a year they have to pay. In other words, this person now owes nearly 1% of their disposable income for life to cover _currently_ unfunded pensions with no corresponding increase in goods or service levels. To put it another way, this person will work ~1/3 of a year out of th…

Why would you look at their after tax income when this comes out of their taxes? (But I can't remember the deductibility rules under the new tax code, maybe they can't deduct state tax payments from federal now). (Also, I made a mistake, that number was household income)

Because unless you can figure out how to get the government to count tax twice that's where the money is going to come from... disposable income now going to tax.

Otherwise now the government now has less money to spend. Aka the "no fuel for trucks" you mention.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#183

Post by cma »

mythrwy wrote: post #182
cma wrote: post #181

Earlier quoted context omitted.

Why would you look at their after tax income when this comes out of their taxes? (But I can't remember the deductibility rules under the new tax code, maybe they can't deduct state tax payments from federal now). (Also, I made a mistake, that number was household income)

Because unless you can figure out how to get the government to count tax twice that's where the money is going to come from... disposable income now going to tax. Otherwise now the government now has less money to spend. Aka the "no fuel for trucks" you mention.

>Because unless you can figure out how to get the government to count tax twice that's where the money is going to come from... disposable income now going to tax.

State tax is deductible from federal taxes up to $10,000. So you can pay that $300 without it all coming out of after tax income.

Most people may not go over standard deduction, but dollar wise state tax is probably paid by high earners who will, since there is a graduated income tax in Oregon.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#184

Post by [deleted] »

bannedaccount wrote: post #88
shkkmo wrote: post #56

Earlier quoted context omitted.

My guess is that the opening line is pure political rhetoric: "What a pathetic ploy to divide the working class against each other." While I agree with the overall point of the comment. I down voted it because of the tone with which it was made and it's lack of attempt to brings any facts or references to bear in reinforcing its claims. A prime example of states spending their money poorly to the benefit of big busin…

There's such a double standard, but no one is ever called to back up a claim like "small government is better for the economy" which I believe is just empirically false. You can plainly see states/countries that spend more on pensions and social safety nets have wildly better outcomes for their citizens. Yet don't see conservative making any reasonable arguments just well wore platitudes about "fiscal responsibly," b…

[deleted]

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#185

Post by Consultant32452 »

jakelarkin wrote: post #135
jaggederest wrote: post #58

I mean, the obvious solution is to move to purely defined-contribution plans and haircut the existing people down to actual returns on invested balance for them. But I have to imagine in a lot of cases that would lead to people being impoverished later in life, which is not especially humane.

is it humane or an entitlement? most people in the private sector work their whole life never get anything remotely close to a pension secondly, its just an intergenerational wealth transfer. another excess of the selfishness of the boomer generation. Who will pay the price ... the school kids getting a crap education in 35 student classrooms in crumbling buildings in a towns who's infrastructure is going to literall…

>most people in the private sector work their whole life never get anything remotely close to a pension

How do you feel about annuities? They can function very much like a pension. Why do you think most people choose not to buy them?

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#186

Post by lordnacho »

At the root of this is a nexus of bad incentives, bad accounting, and bad predictions about the future.

- You have politicians who are in charge of everyone's budget, wanting to show results before the next election. You don't want taxes to go up immediately, so you do a deal with the workers to pay them later. On the worker side, if you have a final salary scheme (or max salary), and you've had colleagues you've worked with for decades, well why wouldn't you promote them?

- The "pay them later" will require you to pay them more, because we all discount a dollar tomorrow over a dollar today. We might not be around, money might not buy the same, and we generally find it hard to put off anything pleasurable. So we need more tomorrow if we're gonna do that deal. A lot more.

- Bad predictions also come from bad incentives, not just bad accounting. It makes it a lot easier to suppose your investment will make 2% more each year, and this internet bubble is the perfect "evidence" that it might happen. Bad predictions will feed back into bad accounting.

But as for the article itself, aren't football coaches the highest paid staff of any organisations that have them? Even the military? I understand the NYT wants people to read their articles, and thus has humans in the pictures instead of pie charts, but it's the pie charts that tell you there's a problem, not the people.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#187

Post by duskwuff »

product50 wrote: post #134
sxcurry wrote: post #131

This article doesn't tell the whole story. Yes, PERS is a problem in Oregon. However, some of the anecdotes of counties cutting services are not related to PERS. For example, Josephine County, next door county to mine, has the lowest property tax rates in the state. Property owners in the county have repeatedly rejected tax increases to pay for basic services like the Sheriff's Department, and as a result have experi…

Well if PERS was not there, that money would have been available to pay for Sherriff's department. Just saying lets tax them is not always the solution.

That doesn't follow. Funding for state pensions comes out of a separate "pool" from local government.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#188

Post by DesiLurker »

bannedaccount wrote: post #93
nodesocket wrote: post #72

It's seems like there should be a cap on state pensions of $20,000 a month. $20k a month should be plenty to support a family even in ridiculous California and New York.

I think a cap on private sector workers income would save more money, there are many more of them and many of them have unimportant jobs. If the government just capped their incomes at 100K a month we could pay off all national debt in months.

you are trolling. go away!

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#189

Post by danmaz74 »

DoreenMichele wrote: post #167
danmaz74 wrote: post #165

Earlier quoted context omitted.

> military spouses have high unemployment rates because locals don't want to hire them May I ask why? Because they know you're going to move soon, or any other reasons?

Yes, they know you are highly likely to move again soon. But really it should say in part because... The benefits package makes living on one income viable. This contributes to spouses being less motivated to job hunt. Another factor is that frequent moves make it nigh impossible to develop a real career. If you have a serious education and want a professional career, this is largely out of reach for most military sp…

Got it, thanks. I suppose that the kinds of online jobs digital nomads do would be an interesting alternative, but those aren't for everybody.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#190

Post by tshibley »

As a 20 something reading articles like these it is incredible to even imagine having enough trust in institutions to basically turn over my future. I wouldn't trust anyone but myself to control my savings and retirement. This is obviously part of a larger trend that we've seen playing out over the last 50 years, and I'll be interested to see how it continues to play out [0]. It seems difficult to imagine a society that can function cohesively when individuals can't trust the institutions we spend such a huge portion of our lives supporting (through time and tax dollars).

I hope to have the chance to reverse this trend in my career, but I have no illusions that gaining this lost trust will come easily.

[0] http://www.people-press.org/2017/05/03/public-trust-in-gover...

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