
This is the way a state ends—not with a bang, but with a slow bleed of funds to its employees.
Indeed, one of the many posited reasons for the fall of the Roman Empire—both the West and the East—was the amount of money promised to the Roman legions, the institution that arguably was holding those vast empires together. Every new emperor (who often came to the throne by killing/deposing the previous one) would buy the loyalty of the troops by boosting salaries and pensions. Heck, that’s often how they managed to get the throne in the first place—by promising the troops that if they’d back him in fighting against the present emperor, they’d make out extremely nicely.
Of course, the money didn’t last. Even when the largesse was taken by force from people, the promises had exploded almost exponentially, and the amount that could be dragged from the populace couldn’t keep up. Money was getting funnelled to this particular group of people, and the various services and grand building projects once provided by the Roman state went by the wayside. Indeed, some of the grand buildings of the past did start to fall apart.
Does any of this sound familiar?
Yes, history is repeating itself, as it often does, but this time, it’s in California:
“Pension reform is a tough issue,” Adachi tells me as we travel to the site of his next campaign appearance, a farmer’s market. “Unlike many other campaign issues, it’s hard to explain. It’s not ‘Save the Redwoods.’” Still, Adachi is largely responsible for having turned the issue of pension reform from a conservative talking point into a mainstream cause in liberal San Francisco. He is running as a “pragmatic progressive”—in fact, one of the most liberal candidates in the race. He argues that the underfunded pension obligations undertaken by irresponsible mayors risk not only bankrupting the city but also “crowding out” essential city services upon which middle-class citizens depend.
In San Francisco, a popular vacation destination, signs of that “crowding out” abound. The streets are filled with potholes that the city can’t afford to fix. Though the city earns much of its income from tourism, since 2010 it has imposed stiff fines for parking on the street during holidays, much to the concern of local businesses. For the second summer in a row, San Francisco has been unable to offer summer school to some 10,000 public school students because of a $1 million budget cut in the program. School budget cuts cause particular concern, since the city’s poorly rated school system is often cited as a major cause (along with a stagnant economy and high unemployment) of the flight of middle-class residents with children. Last year, the city’s parks budget was cut in half, while spending on services for seniors and those with AIDS was reduced by 30 percent. San Francisco taxpayers now spend one out of every six tax dollars on city employee benefits, Adachi says.
Alas, Adachi lost the race to Ed Lee, and while the link here says that Prop C, a pension-reform measure backed by Ed Lee, passed, don’t be fooled into thinking that it was much in the way of reform. Adachi had a competing reform item on the ballot:
Voters chose what was billed as a consensus pension-reform measure even though it would save the City less money than one authored by Public Defender Jeff Adachi, which was headed for defeat.
The dueling pension measures were placed on the November ballot as the City faces skyrocketing pension costs that could reach as high as $800 million by 2014.
Proposition C was crafted by Mayor Ed Lee in talks with members of the Board of Supervisors and labor union leaders. The measure saves The City less money than Proposition D, which was placed on the ballot by Adachi through a signature gathering campaign. Nearly 47,000 valid signatures were necessary. Prop. C was called the consensus measure that city leaders said addressed the problem fairly. It came with widespread support among labor leaders and elected officials.
….
Both measures proposed increasing city workers’ pension contribution rates when The City’s pension contribution rate increases. Adachi’s measure had higher rates and placed a greater burden on higher paid workers. His measure set a baseline of 10 percent for public safety workers and 7.5 percent for other workers, while Prop. C sets a 7.5 percent baseline for all employees.
And while the various of the 1% are pushing out taxpayers – rural landowners and businesses – one wonders who they think will be supporting all of this. The non-state jobs have been fleeing for a long time, so it figures that the liberals are starting their own internecine wars.
As I remarked a little while ago, when you start a class war, thinking it will be your enemies pegged, you need to be careful that it doesn’t redound on you.
Money is running out. If you think people who actually pay taxes will sit still and pay pensions that are still rather generous compared to those in the private sector, while current services are not being supplied . . . well, it’s called La-La Land for a reason.
But remember what happened to the Roman legions. When the Empire fell, the barbarians did not pay those pensions.



Mr. Bingley on December 1, 2011 at 8:13 am said:
Aw, I’m sure they’ll be able just to reach into the Invent-O-Bucks machine and make money magically appear, like the Fed and other central banks did yesterday, and all will be well again.
SkippingDog on December 1, 2011 at 4:47 pm said:
Just remember, Meep, when the barbarians come through the gate the legions will be the last thing between them and you. It’s in your own interest to wish them well.
Meep on December 1, 2011 at 4:54 pm said:
Indeed.
And one way of wishing them well is by making sure the promises being made can actually be kept.
When the promises get too big…. they won’t be kept.
SkippingDog on December 1, 2011 at 5:24 pm said:
All of this current talk about not keeping the promises already made to your legions isn’t the kind of thing that fills the average legionnaire with confidence about your intentions. Shouldn’t the focus be on making sure the current promises are kept, as well as those promises made for the future?
Meep on December 1, 2011 at 6:40 pm said:
That would be nice, I agree. It would have been nice if long ago, every time a boost to the pensions was being negotiated, people were told just how likely it was that those pensions would get paid. How much it would really cost to fully fund the pensions.
The theory was that government doesn’t go out of business. That the taxpayers are an infinite well of $$.
You don’t have to look way into past history to see that sort of thing isn’t true. Just look to Europe, and you tell me how well those pension promises are going.
It’s not because the Europeans hate public employees that they are finding that they’re not going to be giving them the benefits they originally promised. It’s because they ain’t got the money of, and will not have that money. So the pensions get cut, because it’s fiscal reality. Just as with the legions. The Romans simply could not support the promises made.
Adachi is liberal, as is Gov. Brown, Gov. Cuomo, and Mayor Emanuel. All these liberal guys are for cutting public pensions, and not just for new entrants (because that doesn’t get them out of the problem). They have massive deficits and debt to deal with. They are cutting all sorts of things now. You think they’re happy about that?
SkippingDog on December 1, 2011 at 11:07 pm said:
I don’t think anybody is happy with our current economic circumstances, but it was you who inserted the fall of the Roman Empire into today’s discussion. If you truly believe that kind of thing is in our future, then why would you support the cuts proposed by Brown, Cuomo, et al?
The United States remains the country with the single highest GDP in the entire world, surpassed only by the GDP of the entire European Union, yet our overall tax rate is among the lowest of advanced nations. Even our 35% corporate tax rate is illusory, since we provide numerous write-offs and direct tax credits that are completely unavailable in countries with lower corporate tax rates.
None of us have any real idea of what’s to come, but focusing on efforts to reduce the pay and pensions of your “legionnaires” seems particularly short-sighted if you think you’ll need their particular talents in the future so you and your family can sleep safe and soundly at night.
Loyalty runs two ways.
Tough Love on December 1, 2011 at 11:39 pm said:
MEEP .. you said …”If you think people who actually pay taxes will sit still and pay pensions that are still rather generous compared to those in the private sector, while current services are not being supplied . . . well, it’s called La-La Land for a reason.”
I can’t believe your choice of the words … “are still rather generous”.
What an understatement. You’re an actuary, lay it on the line. How about saying that the Taxpayer paid-for share of Public Sector pensions are routinely 2, 4, even 6 times (for safety workers) greater in value at retirement than that afforded comparably paid Private sector workers retiring at the SAME age and with the SAME years of service. And, Taxpayer contributions (and the investment earnings thereon) typically pay for 80-90% of the total cost of Public Sector pensions.
Do you disagree with these statements ?
Notwithstanding the regulations, case law, and Constitutional wording making change difficult, with cash pay in the Public and Private Sector now relatively close, the continued granting of FUTURE service pension accruals based on the absurdly generous formulas currently in place is patently absurd, unnecessary (to attract and retain a qualified workforce), is unsustainable (and digging the hole deeper every day), and grossly unfair to Taxpayers who pay for it.
Marla Singer on December 2, 2011 at 12:49 am said:
SkippingDog, you are in denial. The pensions in California are not sustainable and the state will collapse. There are only two possible solutions – big economic growth, which is not going to happen, or high inflation, which would reduce the debt. Inflation is like a secret tax. And your idea that we need all those state employees – give me a break. Most are slackers.
Oh there is one more solution – huge tax hikes. How do you think that will help the economy? Our host is correct – politicians who wanted votes made promises they knew they could not keep. And now, we’re shocked, shocked that the whole pension world is going to go down in flames.
Your not wanted it to be that way is not going to change anything.
SkippingDog on December 2, 2011 at 12:19 pm said:
Marla – It has nothing to do with what I want, but it does involve legally and morally binding contracts made with individuals in return for their service.
Inflation is something we’ll see the federal government use to pull down our national debt over time, but they’ll call it “monetizing the debt.” States may be able to use part of that to reign in their obligations, since most places that provide COLA’s to retirees limit them to around 2% per year. Yes, there are exceptions where the percentage is either higher or nonexistent, but those are exceptions.
You blanket claim that most state employees are slackers is little different from the kind of bias and prejudice directed at other minority groups, but since state employees tend to have a greater range of diversity and are more likely to be female, perhaps you meant it that way as well.
Tax hikes are inevitable. You’ve had your meal and a little dessert, so now it’s time to pay the bill. Otherwise you’re just another scofflaw who attempts to sneak out of the restaurant when nobody is watching. That’s nothing more than theft.