How Economic Distress Works

Every city, university, transit agency, school district and local government entity which has promised public union employees (labor and labor overhead is typically about 75% of their budgets) full healthcare insurance and plummy pensions in "good times" is now facing the unhappy fact that these labor benefits are completely unaffordable in an era of falling revenues and shrinking pension fund earnings.

With revenues plummeting from all sources--state and Federal grants, property taxes, building permit fees, real estate transaction fees, sales taxes, business taxes based on gross receipts, fees and on and on--the unsustainability of the promised benefits is starkly revealed.