Waste, Fraud, and Abuse

At RealClearPolitics Thomas W. Smith and Adam Andrzejewski of OpentheBooks.com catalog some of the excessive wages and expenses being paid to public employees in California, New York, Illinois, and Washington DC. Here’s Illinois’s reckoning:

In the Land of Lincoln, a place where a young store clerk and future president once walked three miles to return six cents change to a woman he’d inadvertently overcharged, some 110,000 public employees are paid salaries or pensions in excess of $100,000. Under the Democrats’ plan, Illinois will reap $20 billion in bailout money. Despite launching the political career of “Honest Abe,” in our time Illinois is a cesspool of corruption. As a consequence of its Faustian bargain with public employee unions, the financially strapped state is flirting with junk bond status.

There, in the American heartland, Chicago’s city-employed tree trimmers make $106,663 and state correctional facility nurses take home up to $277,100. Higher education is a particularly lucrative endeavor of public service: Illinois community college presidents get nearly half-a-million dollars a year, while university doctors are compensated at packages ranging up to $2 million annually. At the state’s signature public university, the head football coach is paid $4 million – for fielding a losing team.

Thanks to such largesse, every man, woman, and child in Illinois owes $19,000 of the estimated $251 billion pension liability. An Illinois family of four now owes more in unfunded pension liabilities ($76,000) than they earn in household income ($63,585).

And rising since Illinois’s population is declining faster than that of any other state.

There are several problems with these expenses. The first is that the pensions are undoubtedly defined benefit systems, something found unaffordable in the private sector decades ago. They should have been converted to defined contribution plans long ago. The second is that the funds from which the pensions are paid are underfunded—the states aren’t making the contributions as they should. I also strongly suspect that some of the larger pensions are a result of a practice called “double-dipping”, collecting two distinct outsized public pensions piled on top of one another, a practice that should be prohibited by law.

Finally, the issue highlighted by the piece itself: the second so-called “stimulus” package will backstop the ability of these states to continue their outrageous and corrupt practices. They need reforms not subsidies.