In Costa Mesa, California City of Costa Mesa employees almost half have received layoff notices last week. Street sweepers. Firefighters. Mechanics. Payroll clerks. Animal control workers. In total, about 210 employees and 472 of the city, many of whom have worked there for decades. On Thursday, as the messages to pedestrians, one maintenance worker committed suicide by jumping off the roof of the Town Hall.
"It's like they decided to blow up the city," said Billy folsom, 58, a mechanic who received a pink slip. "It is disastrous." Cutbacks are necessary because of the escalating costs of providing pensions for police, firefighters and other workers unionized, they drain the city's revenues, mayors say. Within three years, and projections show that more than one of every five tax dollars spent on employee retirement benefits, which were much more generous in the years before the stock market crashed in 2008.
"Just do the math-that is not sustainable," said Jim Righeimer, a recently elected city mayor pro tem. He campaigned on a pension, raising anger, counter-campaign from the city's firefighters and police. "Under these sorts of everyone, we can't do everything that needs to be done."
Public pension fight
The financial follies of the past boom-by banks that lent too easy by purchasers who bought the places they couldn't afford, by consumers who won't save-recession became clear shortly after. But many States and cities might have overextended themselves as well as their risks they undertook now play in public pension shortfalls raise political battles across the country.
GOP efforts to return benefits of public employee bargaining rights, have triggered mass demonstrations in places like Wisconsin, Indiana and Ohio. But the Conservatives take control of Costa Mesa, city politics, in an assault against a public servant compensation has gone even further. During the boom, many State and local governments promised their employees better pensions. Some employees were allowed to retire earlier. Others were given more of their final salary. Economically, it was easy to do; The stock market was soaring, raising pension fund balances.
Between 1998 and 2008, the last year for which figures are available, the total pension payments by State Governments and local authorities has increased twice as fast as in the previous month, according to the Census Bureau.
But now that the recession has led to steep pension funds, these promises employees past and present may be much harder to keep. Dozens of State and local pension funds across the country are now considered very seriously. 2009, approximately 58 percent of State and local pension funds had less than 80 percent funded, testing the soundness of pension, according to the retirement Research Center at Boston College.
Shortfalls have far-reaching political implications. Already, several politicians who oppose ideologically the public unions have attributed their problems of greed and political influence. Now these unions members are on defense.