Cities in California are under particular pressure because it is so difficult to raise property taxes in the state, and because in 1999, at the height of the tech bubble, the Legislature voted for a huge benefit increase allowing, for instance, police officers to retire at age 50 with 90 percent of their salaries.
“We have this all over the state of California,” said Karol K. Denniston, a bankruptcy lawyer with the firm of Schiff Hardin in San Francisco, who is advising a number of local taxpayer groups. “There is growing recognition that there is not enough money to keep doing what they’re doing, and something’s got to change.”It's a huge issue: people leave at 50, with massive pensions, and then go on and get another job. One of my brothers was annoyed when his neighbor, a retired firefighter not much older than my brother, said "You're always at work. Why do you work so hard?"
My brother answered, "To pay your pension."
Another brother, himself 60, interacts with the agency that fights wild fires. He points out there's a consequence beyond just the financial effect of these early retirements. The experienced hands, with years behind them, take the retirement and go. This means that many of the managers are relative youngsters, who haven't seen that many fires. The years of experience go out with the retirees. And that can have major consequences.
Cities throughout California are in trouble because of this. They simply can't afford to maintain infrastructure or services because the politicians and the unions colluded in an unsustainable practice. The result is, everyone is getting screwed. And it's only going to get worse.
Update: I'm generally in favor of unions, but I do have big problems with this, and don't think I don't blame the Democrates. I also have problems with how the powerful prison guard's union dominates our politics in this state, which has led to skyrocketing support for prisons and collapsing support for education.
I'm not saying people shouldn't have pensions. I'm saying that a system where they retire at 50 is a problem. I'm saying a system in which we can't afford to pay our current policemen because of what we pay the retired policemen, is a problem. Many cities in CA have unfunded pension obligations, which to fund fully requires that they cut current staff and current services. Cities like Vallejo and Stockton have gone into bankruptcy. Vallejo is a very grim place where neighborhood watch groups try to cover for the police, because the PD has been cut so deeply to cover pensions, and don't even think about a library. It's a libertarian nihilist's dream and a liberal's nightmare.
Update 2: I'm 50, and I'd love to retire. But I can't retire before 67, and it won't be with a pension or medical insurance, but a 401k and medicare. Because I got an advanced academic degree and additional post-doctoral training, I didn't enter the "real" work force and start contributing to a plan before my 30s, prior which time I was paid next to nothing so no savings. Because I stupidly became an academic, I never have or will made a salary commensurate with all that training. And because I'm a scientist, and the government no longer wants to fund science, I've taken a 25% pay cut. So yeah, I'm not keen on driving through potholes, living with a part-time library, and paying generous retirement benefits to someone my own age, who is not disabled and who could still be working.