Much of the battling over spending and taxes in New York (and many other states) is really a fight over public-employee pensions. As you choose a side, it's worth realizing that many of our kids' teachers are millionaires -- thanks to the taxpayers.
How'd it happen? Recall a scene from a few years back over in New Jersey -- when Gov. Jon Corzine hollered to a crowd of public employees: "I'll fight to get you a good contract!"
Fight whom -- himself? He was the one who was supposed to represent the taxpayers.
But the diffuse interest of the general public has no seat at this table.
Politicians have every incentive to give the store away -- since unions then recycle their loot right back in the form of campaign contributions, TV ads, phone banks, canvassing labor and public rallies. This is completely legal, institutionalized corruption, and it's the kind of thing that in the private sector lands you in front of a prosecutor.
On some level, our elected officials had to know this would lead to disaster. But the odds of disaster on their watch always seemed small. Others could clean up the mess on some other, distant, day.
Welcome to that day, and it's not at all clear how to solve the problem. In New York, pension guarantees are protected by the state Constitution.
How big are these promises? In my town of Bedford, a retiring teacher today gets a pension of about 70 percent of base pay for life -- which typically works out to about $84,000 a year (not taxed by the state, incidentally). The retiree also gets family health benefits, worth another $16,000 or so a year.
Live for 25 years, and that's a total of $2.5 million.
And they've got an excellent chance of collecting for a quarter century -- because they get to retire with full benefits at age 57.
Discounted at 4 percent, that's a current value of $1.6 million. That means that, for you and me to get that hundred grand a year for 25 years, you'd need to have $1.6 million socked away in an IRA when you retired.
Wouldn't it be nice to have the taxpayers just hand it to you?
Yes, many of those nice teachers we've been trained for all these years to think of as chronically underpaid are millionaires.
But it's worse than that. I know, because I have read all 115 pages of my town's teachers contract. Some highlights:
* It's not difficult to make six figures, and that's for 181 days a year of contractual work -- versus around 240 days for the rest of us.
* And out of that 181 days, they get 15 sick days a year, plus four personal days and five bereavement days. Unused sick days go into your "sick day bank," for which you are paid at retirement.
* Raises every six months are automatic, regardless of performance.
* Extra pay for everything imaginable: Coaching sports, monitoring recess, helping with plays, etc. -- all the things private-school teachers are expected to do for nothing. My personal favorite: $1,339 for overseeing the juggling club.
It takes some effort to figure it all out -- for good reason. We're shocked enough to discover our kid's teacher is making six figures; imagine how we'd feel if we knew the real number. The unions aren't dumb.
You may think this is wonderful, but it's not sustainable. Pension obligations alone have states like ours at the threshold of insolvency -- with politicians like Chris Christie and Andrew Cuomo stuck with cleaning up the mess. Can they do it?
Well, the Berlin Wall once seemed like an immutable fact for those of us who grew up with it. Then, overnight, it was gone. That's the way of unsustainable paradigms: outwardly unchanged for years, but with pressure mounting out of sight. When that pressure can no longer be contained, its release is sudden and shocking.
The Berlin Wall moment for public unions is fast approaching.
Scott Johnston is a taxpayer who works in the financial industry.