- Special Sections
- Public Notices
To fully fund New Mexico’s public sector pension obligations, both state and local, within 30 years will require an immediate tax increase of $1,756 per household per year.
That puts us ninth nationally in what might be called the ranking of how well states have ignored their pension obligations. That statement is a little overly nasty.
The Legislative Finance Committee and others have a fair record of raising the issue over the past few years. But the accomplishment is little.
Five states will have to cough up more than $2,000 per household per year. They are, in order, New Jersey, the champ at $2,475; New York; Oregon; Wyoming; and Ohio.
The problem is accounting, not cash, for the moment. As with any investment, one picks a rate of return, an annual percentage expected to be earned on the cash invested. If the idea is to have, say, $1,000, in the future, an amount of money is set aside and invested.
If it happens, the rate of return assumed will turn the original amount into $1,000. The flaw is that the assumed rate of return has to make sense, if there is to be a reasonable chance of it happening.
The usual rate of return used in public pension accounting is eight percent. That doesn’t make sense, probably never has. It certainly doesn’t today.
If you currently subscribe or have subscribed in the past to the Los Alamos Monitor, then simply find your account number on your mailing label and enter it below.
Click the question mark below to see where your account ID appears on your mailing label.
If you are new to the award winning Los Alamos Monitor and wish to get a subscription or simply gain access to our online content then please enter your ZIP code below and continue to setup your account.