Even More on The Coming War Over Public-Sector Pensions


Via the Washington Examiner comes news of a brewing showdown in Fairfax, Virginia, where the school system is looking for a whopping tax increase to pay for teacher retirements and benefits. Here's verbiage from the Fairfax County Taxpayers Association (FCTA), which is against that move:

"The FCTA asked why the school board is urging the supervisors to raise taxes by $81.9M although only $9M is needed to pay for next year's expected increase in student enrollment.

"The school superintendent acknowledged that the reason is the increased cost in employee benefits, especially pensions. According to the schools' proposed FY2011 budget, employee benefits costs are increasing by $98M, of which $71M is for pensions and another $15M is for retiree medical benefits.

"The school board has been less than straightforward with the community about this. During her opening remarks at the forum, school board chairman Kathy Smith talked about cuts to band and sports, and bigger class sizes, but never acknowledged that the cuts were being made to pay for increased benefits costs. School board members urged the audience to ask the supervisors to raise taxes. If taxes are not raised, then the board will cut band and sports and increase class size to make the pension payments."

Whole thing here.

Hard-fact time: Taxpayers everywhere are shelling out many, many, many more real dollars per student for public education than they were 30 years ago (with no clear improvements in outcomes [see this and this]). Indeed, inflation-adjusted costs per pupil have gone up over 200 percent since 1970, while student achievement is flat (at best). Can you think of any other part of your life (especially one in the private sector) where you are paying twice as much for the same freaking outcome? Say what you will about rising medical costs, but the pills that cure our ills nowadays are so much better…

As we've noted here, this is a story that is only going to gain in regularity as the gap between public-sector and private-sector compensation grows (public-sector already has a 70 percent advantage!) and as private-sector workers increasingly fund their own retirements via 401(k)s.

The basic bargain about public-sector work, hammered out decades ago in a very different world, is supposed to be: You give up status, upward possibility, and compensation now for job security and payoffs later in retirement. That has never really been true and is certainly less so now. Yes, public-sector jobs ofer more security than their private-sector counterparts, but compensation is also higher on average and the benefits, especially in retirement are gold-plated to the nines. That bargain, which is unsustainable economically, is going to hit the rocks. The only question is: Who is going to pay? Taxpayers or the public-sector workers?

Don't miss Reason's Feb. cover story about "how public servants became our masters." Just click on the image of the big boot there on the right.