In the current state of financial crisis that our national and local government finds themselves in, financial analysts and local government advisers have been busy trying to find ways and means by which to bring down an ever ballooning budget deficit due to uncontrolled government spending. In Florida State, a suggestion has been made to cut the state workers salaries by 5 percent in order to give a semblance of the state being able to save money.
However, since these state workers are also affected by the economic crunch, it would seem very unfair if they were to take a pay cut while high ranking government officials get to keep their bonuses and other “perks” of their positions. Indeed, these “perks” make them seem like they are earning more than they should be but if one were to factor in the rate of inflation with the amount of their salary, it would seem like anybody who has a steady job and income right now are merely “getting by”. No, reducing the salary of state workers is not the answer to helping the state save money. There must be another way.
Considering that all workers are members of the Social Security system of the country, perhaps the best way for California to save money would be to remove those hefty contributions that state workers make towards their Public Employee Pensions? Perhaps it would be more prudent and wise to cut future benefits of employees rather than damaging their current financial status? Afterall, workers can prepare for the future, but can barely handle the present. So any money that can be brought back to the employee in any way, shape, or form, is to be considered a blessing.
These public pensions are run by unregulated public employee unions who have been receiving pay and benefit increases that outpaces what their private counterparts actually make by about 2 – 4 times. It has been said that the average public employee of California is a millionaire upon retirement due to unbelievably high pensions they receive thanks in part to the unregulated pension system.
We all complain about the AIG executives and their bonuses that were worked into the loan we as taxpayers gave the company. Yet we seem to be blind to the fact that these public pension systems have been hiking their pension packages in order to be comparable to the private sector. With the overestimated return on investments that the pensions have projected, the truth is that the pension fund does not have the money to cover all the benefits they have promised. Which is why by abolishing the Public Employee Retirement Funds, the biggest state and local government liability – payments to state employment retirement funds, can be restructured to aid in local and national government in fending off any snowballing financial crisis for the state in the short and medium term. This may also be the solution to narrowing the gap that now exists in our government budget deficits. And finally, by dismantling the public employee pension system, much more of the state budget can be diverted and used to fund the public works and public sector services.
So, do I think it is really necessary to cut the government workers salaries in order to save money for the state? My answer is no. One merely has to go back to the accounting books of the state and go over it with a fine tooth comb for the real reasons as to why our local government continues to financially bleed.