K-12 Tax & Spending Climate: Most Americans Not Willing To Pay Higher Taxes For Public Employees, Entitlement Programs; California Pension Changes

Rasmussen Poll:

Most Americans would not pay higher taxes for specific public services in their states, but they are more supportive of paying for education and staffing law enforcement than supporting state employees and entitlement programs.

The latest Rasmussen Reports national telephone survey of Adults shows that only 19% would be willing to pay higher taxes to avoid layoffs of state employees. Sixty-nine percent (69%) say they would not be willing to pay more in taxes for this reason. Another 11% are undecided.

Adults feel similarly when it comes to funding entitlement programs. Twenty-two percent (22%) would pay higher taxes to prevent cuts in entitlement programs for low-income Americans. Sixty-three percent (63%) say they would not pay more to keep these programs afloat. Another 15% are undecided.

The Economist:

This is because it would begin the undoing of a policy disaster dating back to 1999. That was when the Democratic legislature and the then governor, Gray Davis, a Democrat elected with union support, thanked the unions by giving state workers pension increases of between 20% and 50%. Many highway-patrol officers, for example, were allowed to retire at 50 with 90% of their final salary. All told, California now has probably the most generous public-sector benefits in the country.

That, however, is not what outrages Mr Schwarzenegger, a Republican, or his brainy economic adviser David Crane, a Democrat. Rather, it is that the pension plans--above all the California Public Employees' Retirement System (CalPERS), the largest such scheme in America--pretended that this generosity would not cost anything. In 1999 the dotcom bubble was still inflating, and the plans' actuaries predicted that their retirement funds would gain enough value to pay the increased pensions. By implication, they assumed that the Dow Jones Industrial Average would reach 25,000 in 2009 and 28m in 2099. It is currently at around 10,300.

Posted by Jim Zellmer at July 9, 2010 4:22 AM
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