CHANGE: New rules expose bigger funding gaps for public pensions. Are they underfunded? Or overgenerous? Both! “The accounting changes themselves will not force policymakers to alter how they fund pensions. But finance experts say that by simply highlighting greater funding gaps, the rules will intensify pressure on state and local governments to allocate more of taxpayers’ dollars to their pension funds. More likely, public workers may have to contribute more to their retirements or see promised benefits curtailed, measures that have already been implemented in more than 40 states. . . . The changes add to the growing tensions over the often generous retirement benefits that public employees receive. Union leaders argue the packages compensate for lower pay, but critics, including GOP governors, say the pensions are unfair and have become unaffordable for taxpayers.”

UPDATE: Reader Joe Inscore writes:

I’ve been reading with interest your posts on public pensions, but one aspect of the pension crisis has not received enough coverage. The infrastructure of cities has been on a trajectory of decline as pensions are taking a bigger bite out of city budgets. In the small city where I reside, the streets have been in a state of deterioration for some time now. The city recently borrowed $2 million for the street fund in order to complete a project that had run out of money. Dilapidated and abandoned homes and automobiles litter the landscape, and things like spraying for mosquitos are no longer done, which has resulted in outbreaks of disease such as West Nile virus. The implications of the pension crisis are far worse than just the employees involved as the quality of live and liveablility of our cities and towns is now in question.

Yes.