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Special Report
An Amazing Public Sector Success Story
Too bad it’s the kind that can’t happen in Barack Obama’s America.
(Page 3 of 3)
As far a job creation is concerned, the great spending spree that Barack Obama embarked upon in 2009 is reminiscent of Lincoln’s remark about the loquacity of a fellow lawyer: Being a miracle of compression in using so many dollars to so little effect.
St. Louis Blues
St. Louis is facing
fiscal crisis of its own. As it happens, this crisis is due a
30-year history on the part of the city’s elected officials (almost
all Democrats) in topping up pension, disability, and other
benefits for its firemen and policy.
As long ago as 1984, then-Mayor Vice Schoemehl warned that overly generous pension payments to fire and police pensions were putting the city on a path to bankruptcy, saying, “If the people of this city knew what the Board of Alderman was doing (after a 27-to-0 vote to support a big pension payout to firemen), they’d reduce the size of the board by lynching.”
The former mayor’s day of reckoning is fast approaching. The city’s annual contribution to fire pensions has quadrupled from $6.8 million in 2008 to $24.3 million this year. The payout to retired firefighters is now equal to 74 percent of the department’s payroll — and rising. A top aide to Mayor Francis Slay said only half-jokingly: “(Soon) we won’t have a fire department. We’ll just have a fire pension.”
Police pension cost in the city of St. Louis have also jumped and are now equal to 48 percent of payroll. Said Roth, the public safety director:
Every dollar that we spend on pension is one less dollar that we can spend on putting firefighters, police, or neighborhood stabilization officers on the scene.
The steep climb in pension costs throws everything out of order in the city’s budget and it is ultimately unsustainable and unaffordable and it will be something approaching bankruptcy if recent trends hold.
St. Louis is far from alone in facing this quandary. According to the banner story in this weekend’s Wall Street Journal (“Hard Times Spread for Cities”), the cost of pension plans for state and local governments across the country has soared from a little over 5 percent of payroll in 2001 to more 15 percent today.
Over the last four years, four California cities have sought bankruptcy protection — Vallejo, Stockton, Mammoth Lakes, and San Bernardino.
Barack Obama did not create the mess that cities and states are in today because of soaring pension costs. But he is also the last person on earth to act as savior, having taken the same reckless promise-now, pay-later approach to government that led over time to the problems that cities and towns are experiencing today.
Unlike many city and state officials, Obama is still in a state of denial — refusing to recognize that there even is a problem.
Unlike the British fire chief cited at the beginning of this article, our president has no desire to spend taxpayer money sparingly and wisely. If given the chance, he will happily spend the country into bankruptcy.
About the Author
Andrew B. Wilson, a frequent contributor to The American Spectator, writes from St. Louis.
Letter to the Editor View all comments (40) | Leave a comment
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Von Mises Jr| 8.17.12 @ 6:48AM
In New Jersey, teachers earn approximately $100K near retirement age and have a $25K health plan. They retire at 55 with $50K plus retain their health care for life. So if they work from 25 to 55 and live to 85; they actually earn up to $150K plus $50K in benefits in their final years for nine months work.
Governor Christie deserves credit for taking on the pension bomb in New Jersey. A couple years ago when he took on the unions, the pension should have been funded $107B and had $47B. The health benefits were unfunded and had a net present value cost of some $65B. So to pay the promises made, the state should have had contributed over $170B while it had less than $50B, or about twenty-seven cents on the dollar.
This is how GM collapsed. They had ten health care plans to pay for every worker due to the reduction in the size of the company. If their plan cost $15K, every current worker had the equivalent of $150K in burden. It imploded and we bailed out their pensions and benefits when Obama nationalized the company and the unions used the stock to fund these costs. When the states collapse, your house and savings will fund the socialist policies.
Pecos Pete| 8.17.12 @ 9:00AM
Von: In regard to GM ... even though GM received significant help (monetary and legal) from the bailout, it now appears that GM is approaching another fiscal cliff. In my opinion, GM will be facing another round of bankruptcy issues by 2015.
Von Mises Jr| 8.17.12 @ 9:51AM
GM IPO was $33 and now it is trading at $22. The TARP Inspector said it would need to trade at $131 to break even for taxpayers.
They got $50B in bailouts and a $50B tax break, and they are still crapping the bed.
Houdini| 8.17.12 @ 10:54AM
The reason GM is facing that fiscal cliff is due to the fact that they really didn't go through bankruptcy....just rearranged the deck chairs. A true bankruptcy would have killed the union contracts, restructured all loans and pension obligations, and the firm would not have gone back into operation unless it had a reasonable chance of survival.
Trinacria| 8.17.12 @ 12:23PM
That plus the fact that they haven't built an automobile that anyone wants to buy in the last 40 years...
Al Adab| 8.17.12 @ 3:43PM
Except for the federal agency fleets which keep production of the Volt going. Just think how wonderful it will be when the new manadate comes down that every family second car must be a Volt.
Alan Obama Fan Brooks | 8.17.12 @ 7:49PM
Why bring up an English case?
Von Mises Jr| 8.18.12 @ 7:09AM
We had another Chick-Fil-A moment yesterday at the bakery where they refused to serve "Bite-Me." The people are not taking this shit anymore and the regime is beginnning to realize it is toast.
http://www.breitbart.com/Big-G.....-Saying-No
Von Mises Jr| 8.18.12 @ 7:12AM
BTW, I am talking to my friend Al. I don't waste my time with little back hole trolls like Brooksie. It would be like debating a cinnamon role.
Von Mises Jr| 8.18.12 @ 7:14AM
Of course I meant "roll." That constitutes a logical debate with liberal morons who think a spelling mistake wins an argument.
Alan Obama Fan Brooks | 8.18.12 @ 7:01PM
von Strangelove,
America can only do business-- nothing more.
Occam's Tool| 8.17.12 @ 11:42AM
To give a counter example: in Minnesota, if I retire at age 72 as a physician, having started work with them at age 47, my pension will be 104,125. That's after 25 years of being on call 8 days out of 14 with 4 weeks off per year, but with every other weekend spent working. (Therefore, I get fewer days off than a guy does who gets NO vacation but just gets every weekend off. In addition, when I work holidays, I get no overtime and no compensatory days---I am paid my $800.00 holiday pay and then paid for call time (24 hours), with the onsite time being subtracted from those 24 hours and then paid full time, but no higher, and full time only for those hours on site).
That is to say, 12 days on, 2 days off. And, incidentally, funding 50% of that pension with my own pre-tax deducted money. Health care benefit is not retained after retirement in Minnesota---and our retirement age for full pension is set at age 66.
In addition, our hourly wage is 98.64 per hour for a board certified MD. Call time is 1/4 of that. The MDs in Minnesota believe that is fair. We have not received a pay raise in at least 5 years.
Now, THAT's the way to run a state pension system!
Trinacria| 8.17.12 @ 12:33PM
And let's not forget that the $100K salary is based on working 8 months out of the year (and let's face it, we're being generous to concede that anyone whose "office hours" are 8 to 3 is working a full day, despite the absurd claim that lesson planning and grading papers - which can be done sitting in front of the tv watching Judge Judy - constitutes arduous work).
Alan Obama Fan Brooks | 8.17.12 @ 4:08PM
As conservatives (Rightists) you know nations ae not comparable.
topcat52| 8.19.12 @ 9:13AM
Teacher salaries in NJ vary by school district. I wanted to leave a web-site for you and found this: http://schoolfinance101.wordpr.....-counties/
While it is 2 years old, virtually no teacher in NJ earned $100,000 even after 30 years. I am not a big fan of overly large pensions, but facts are facts. NJ is also one of the highest cost of living states with very large state and property tax burdens.
Sean| 8.17.12 @ 7:36AM
Most cities could cut Fire and Police and still do well enough. Most city firemen that are highly paid mostly respond to medical calls and accompany the paramedics who do the actual work. The firefighters that do the hardest work like fighting forest fires are usually volunteers or lower paid.
c. j. acworth| 8.17.12 @ 10:53AM
Just before my mom died this spring she was living with me. One night she got up to go to the bathroom, fell and broke her arm. I called 911. My neighbors happen to be first responders and were on scene in 2 minutes. The ambulance took about 25 min. to arrive. In between, most all of our fire dept. showed up. Why, I have no idea. They are all volunteers, (this is rural NH we're talking about) but that equipment still costs money to operate and maintain.
Cat Shot| 8.17.12 @ 11:32AM
My brother and his son have been volunteer firefighters in rural NH. The fact that you wonder why the fire department showed up suggests that you would not understand the explanation.
Jack London| 8.17.12 @ 9:10AM
I thought many cities had already cut many firefighters as well as other public employees. And the author obviously isn't aware that we have many preventive fire projects as well as the one he cites in England.
Al Adab| 8.17.12 @ 9:30AM
All too many of our public institutions have become more concerned about their own power and influence, they have become self-serving- and have forgotten the purpose for which they were created. Not all local agencies and not all state or national agencies, have become such, but the numder or percentage is significant enough that the issue needs to be engaged. If the instruments of public policy become institutions of their own interest no longer is the public interest served.
Jack London| 8.17.12 @ 10:11AM
"Not all local agencies and not all state or national agencies, have become such, but the numder or percentage is significant enough that the issue needs to be engaged."
What 'number or percentage' Al? What's your source?
Al Adab| 8.17.12 @ 11:34AM
Gee Jack:
I would imagine even you could think up a couple government agencies that are more interested in themselves that the "issue" they were once founded to correct.
Occam's Tool| 8.17.12 @ 11:45AM
Oh, say, the National Endowment for the Arts. NPR.
Or, to come closer to your interests, Jack---the $800.00 bomber toilet seats. Read over Jefferson's explanation of government, men, and angels sometime.
Jack London| 8.17.12 @ 12:55PM
"Oh, say, the National Endowment for the Arts."
Just because you're a Philistine doesn't mean the rest or us are. Is this the best you can do?
George S| 8.17.12 @ 1:15PM
Does "the rest of us" mean those who enjoy the art but do not want to pay the artist from their own wallet so they demand the taxpayers do it for them?
Butch| 8.17.12 @ 1:45PM
It's true. They have ambitous, comprehensive mission statements, professional administrators who may not even be "expert" in how the unit managed does its job, growth and PR objectives, and what amounts to marketing objectives for these administrators, who are rewarded for finding new applications for what their unit does. There is an aggressive growth mentality imported from the private sector, but resulting only in more claims on the public treasury. They have conventions of similar agencies throughout the nation to share ideas in this respect.
The Fire Chief's prevention campaign is an example of desirable expansion of scope, but missing nearly always is the personnel cutback effected by the chief. Instead, the result is a higher cost to taxpayers and a lower workload for the employees. Sometime, they wind up executing their original task less effectively due to the expanded scope of their activities. Colleges and Universities are a good example of this latter.
Louis Jenkins| 8.17.12 @ 9:51AM
Yes, it's true. Firemen have safetied themselves out of jobs, and as a result, have begun to run public calls instead. The question of fire depts. running ambulance calls is valid, and they've trained themselves up to the EMT-B level. What's next? As in some US cities they've become public safety officers, which includes law enforcement, EMT-Bs, and fire fighters. Seems in Liverpool they've now got social workers working as fire fighters. Will that be the next hat they wear?
pogybait| 8.17.12 @ 10:20AM
Having lived in England, one can only be certain that they will create a Ministry of Environmental Fires and will be mandated to have an environmental officer to determine to total number of carbon credits lost for each fire.
Houdini| 8.17.12 @ 10:59AM
Where I live in the Northwest a recent study showed that fires represent 2% of responses by fire fighters. They work 2 days per week, make an average of 120k.
cicero| 8.17.12 @ 11:17AM
Once our "public servants" had their benefits raised so that they could make as much money not working as they could working, the present outcome was inevitable. When you top that off with being able to retire after 20 or 30 years on the job, you see why we are broke. The only way to stop the nonsense is to make all pensions payable at age 67, just like Social Security. Allowing public employees to retire at 45 to 55 years of age, and draw pensions while working at another job (ofter for another government department), is rediculous. In the real world, any company that offered such a package would soon go out of business - just like GM.
merlin| 8.18.12 @ 8:21AM
Defined benefits pensions are the problem whether public or private. The government promises that tax payers in the future, (our children and grandchildren) will pay the pensions and in the private sector, the business promises that the pensions will be paid by the profits in the future. In both cases, it is just kicking the can down the road. Defined benefits pensions should be illegal. Your pension should be what in in your account.
Petronius| 8.17.12 @ 1:42PM
The St. Louis police and Fire pension money was invested and posted good returns for over 15 years. The profits were pocketed by politicians instead of amplifying benefits or getting reinvested. Officers, your benefits are minimal because of what went for the Clay slush, the Banks bling, the Bosley bunch, and whatever. St. Louis is down to its last heritage company, Peabody Coal. And President Obama pledges to drive them out of business. The only honest people remaining in St. Louis are the superannuated south side Catholics who can't afford to start over someplace else, urban adventurers who detest the burbs, and beleaguered inner city residents who pass their days in prayer while they duck incoming fire from the gang bangers. But life is good, so long as you're in on the fix.
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topcat52| 8.19.12 @ 9:15AM
While school staffing may have doubled, it is not due to the hiring of additional teachers. It is due to the hiring of additional administrative and support staff.
lightening| 8.19.12 @ 1:15PM
Good job, Sir. I work for one of the State's in the U.S. I have never seen such lazy, stupid, obese wastes of taxpayer dollars. Privatize everything.
Murphman| 8.19.12 @ 5:20PM
The 911 system is broken. It is a microcosm of what is wrong with government programs. Almost no call is turned away. My experience as a volunteer: "my son has a tick on his leg" and the medical first responders and ambulance roll; medical first responders and an ambulance respond to calls from people who are sick because they overimbibed as it may be "alcohol poisoning"; minor fender benders require a fire engine just in case of an oil spill. And I could go on. It is a combination of fear of litigation and "job security" for the paid EMT's and fire fighters that time and resources are wasted.