Delaware’s Budget Mess
Today’s News Journal takes a look at the state pension obligations and how it’s impacting the state budget. The news is not good:
According to Ann Visalli, director of the Office of Management and Budget, 16 percent of the state’s work force is eligible to retire today. “We have an aging work force,” she said.
Markell’s budget calls for $3.2 million to be pared from employee health and pension costs, a proposal he said will save at least $100 million over five years. However, he did not detail how those savings would be realized.
I think we’re going to have to take a hard look at the proposals that will come out regarding pensions. Despite rumors to the contrary, the pensions are good but not luxurious. The NJ spells it out:
Some pensioners receive less than $600 per month in benefits, while almost 5,000 receive benefits of less than $1,000 a month, Hassman said.
Even those who worked 30 years receive an average of just $23,000 a year, he said.
They haven’t seen an increase in their pensions for more than 5 years. The other places where the governor plans to cut is Medicaid and assistance to the indigent:
Markell also wants to cut Medicaid costs, which are consuming an ever-increasing portion of the budget, and eliminate $3 million in cash assistance for adults who are unemployable, destitute and often homeless.
Again, we haven’t seen the Medicaid proposals yet but my nose is twitching saying we’ll probably raise eligibility requirements, meaning people will lose their coverage. The rising cost of health care is taking a huge bit out of our economy.
Tags: Delaware, Delaware Budget, Delaware General Assembly, Governor Markell
16 percent of the state’s work force is eligible to retire today. “We have an aging work force,” she said.
Not necessarily. As I understand it, police and probably other uniformed officers are eligible to retire at age 45, and that ain’t old. And the terminal salaries for those jobs can be in the six figures. So in a down economy there is every incentive not to retire. Also aren’t we graduating fewer recruits from the police academy to “save costs?”
When you have employees collecting benefits starting at age 45, that can pad out a state’s pension costs in a hurry. I’m not sure anyone has the guts to take on police pensions.
Public as well as private pensions are tied to overall investment performance. So it is not surprising pension benefits have not gone up lately. Nothing will help fix state pension funds as much as a strong equities boom.
Also, any Dem governor facing these huge health care costs should be blasting Obama for failing to take on the insurance companies and drug companies with respect to cost controls in the HCR bill.
And $23K is not that bad for a pension, depending on whether that figure includes Social Security and health, especially since pensions usually assume your house is paid off and your kids are done college. That is half the working salary for many jobs.
Someone said that a government IS the budget. Everything else is just talk. So if we have a budget that fails to raise taxes on the freeloading rich, we have a government that accepts a long descent into irrelevant banana republic-hood.
Hurt pensioners, old folks on Medicad, and the homeless. That’s somehow preferrrable to taxing Delaware’s wealthy a little more. Those values are bizarre.
I know Dana. We are looking at sheer greed and craziness trying to be passed off as sobriety and financial propriety.
I agree with Obama2008- $23k annually in a pension is not that bad. Lets say that one saved $1,000,000 over their 25 years of working, that would kick off $23k at 2.3% interest only. Or at todays interest rates of say 1% if you took down principle as well. What would it take to save a $1million? Estimate you earned 8% on your savings you would need to put away $12k a year. So thats after taxes of course. So add another $15k a year to ones salary, thats not bad. I dont like the double dipping of pensions. I do believe that everyone, the worthless rich and the hourly employee need to make sacrifices today to get the economy back on track. We cant solve all our issues by taxing the ‘freeloading rich’. Arent they the ones who have risked their saving to create jobs?
$23,000 a year is barely over the poverty rate. Yet some think that is too much for retired senior citizens. That’s remarkable.
Delarf the organization that lobbies for the private providers for the disabled are very concerned. Our disabled in group homes, foster care havent seen a cost of living raise in 7years! The disabled already pay a co-pay out of there $95.00 a month for medicine. As John Kowalko just stated, we in the single payer movement have been urging legislators to at least compare the numbers of a single payer system in Delaware. The Solutions for Progress an independent, non partisan group did the study a few years ago. They determined this state could cover not only medical, dental, vision, long term care, vet care and every other kind of care a single payer system would conservatively save the State $4Million a DAY. So why hasnt Markell and the democrats bothered to review a single payer system as has the Governor of Vermont. Not only VT, but NH, PA,Maine and California all have their single payer bills ready to go forward.
The republicans say “Obama care” is unconsitutional! Well I hope they repeal this health care because as Anthony Weiner said,
“we know Medicare for all a single payer system is constitutional”.
$23,000 a year is barely over the poverty rate. Yet some think that is too much for retired senior citizens. That’s remarkable.
Read again. I was postulating that the $23K was added to Social Security, which is a roughly similar annual amount. Is that correct? I think it is.
Added to the state medical and prescription benefits, and it is more like $40-50K, pretty close to many full time state salaries. Not bad, considering your living expenses are greatly reduced after retirement (unless something went drastically wrong with your planning). A lot better than I will get in the private sector.
But if you are just looking for another opportunity to get your more-compassionate-than-thou schtick going, then ignore all the above and carry on.
If I’m wrong and the whole net income is capped at $23K – well yes that would suck. But I don’t think that’s the case.
Here’s a few places to get some actual facts:
http://www.delawarepensions.com/services/calculator.shtml
http://www.ssa.gov/planners/benefitcalculators.htm
Heck Yeah-
Everyone needs to make sacrifices? Really… How many more sacrifices should my grandmother make–she barely has enough (and she’s still working at 77) to eat and get her prescriptions–she eats spaghetti and ketchup! How much more should my parents sacrifice, that while my mother has been looking for a job for 2 months, student loan bills are in default not to mention other bills…and how much more should the poor sacrifice today? State workers and other government workers (county etc.) have sacrificed pay and benefit increases, increases and cuts that some can’t afford because they get paid crap. What should they sacrifice?
And what have the rich sacrificed exactly? Because you say they’ve risked their saving to create jobs… Really? Because there aren’t many jobs out there and the rich are still rich… so they sacrificed what exactly?
There are other programs that could and should be cut before we start cutting vital programs to our most vulnerable citizens. But here is what we shouldn’t cut- vital health and social services programs (Medicare/Medicaid, programs that help those who can’t help themselves) and education.
I’m staunchly Democratic, but I doubt, if any of this happens, the Governor will get my vote in ’12