A new report from The Pew Charitable Trusts has found that the public pension funds in two states -- New Jersey and Kentucky -- might run dry during the next economic downturn.
CBS reports,
"Even after eight years of economic recovery — eight straight years of stock market gains — the public pension plans are more vulnerable than they've ever been to the next recession," researcher Greg Mennis said in an interview.
Governments have been ramping up contributions to the funds to help cover the promises they've made to retirees, but that leaves less money to spend on schools, police, parks and other core government services.
Another option is reducing pension benefits. A plan to do that in Kentucky led to teacher walkouts earlier this year.
States like Kentucky and New Jersey would have more money if the federal government didn't require them to fund federal mandates.
Unfunded federal mandates are one of the major abuses of power perpetrated by D.C. The feds require the states to implement certain policies but don't give them all the necessary funds to do it. This practice has transformed many state legislatures from independent, self-governing bodies to nothing more than regional offices for the federal government.
It's time for the states to reassert control of their budgets -- and their futures. An Article V Convention of States can propose constitutional amendments that limit D.C.'s ability to impose their own policies on state governments, freeing that money to be spent on the priorities of the people.
