|Pennsylvania's Pension Bomb|
You've heard me talk frequently about the enormous fiscal black hole which is Pennsylvania's Pension Bomb. For example, while people in progressive circles howl about 'cuts' to education, the fact is that the state and local schools will be spending $500 million more this year....it's just that 95% of that new money is going into pay for retired teachers.....leaving just a paltry 5% for the kids.
One of the truly puzzling aspects of the battle in Wisconsin was how many nonprofits got involved...on the side of the status quo! What's baffling is how these nonprofits lined up with a special interest which was trying to lock in the largest piece of the pie for its members. So as that pie shrinks in the Age of Austerity, it would be the nonprofits who would be forced to shoulder the budget shortfalls, staff cuts, and eventual closure.
In the current Chronicle of Philanthropy, William Schambra has a devastating piece asking why nonprofits support the gilded pay/benefit/pension packages of public worker unions which are crowding out spending on basic human services. He relates:
The June elections in California and Wisconsin made clear that the public is increasingly disinclined to support an expansive government if that means not compassionate provision for the poor but rather the transfer of scarce dollars from the pockets of hard-pressed taxpayers directly into the health and retirement accounts of comfortable government workers. Foundations and nonprofits would serve their noblest cause in the most politically savvy fashion by challenging the grip of labor unions on the progressive agenda.
Which raises the fundamental question: Why are progressive nonprofits lining up in support of an effort which will ultimately lead to their own doom?