In a recent episode of the NBC comedy series Parks and Recreation, the program’s characters were forced to confront a complete and unexpected cessation of city services after a disappointing audit. See Parks and Recreation, “The Master Plan” (NBC television broadcast May 13, 2010). While the episode focused on the humorous effects of the shutdown on the city’s parks and recreation department, it paid little, if any, attention to the underlying causes of the crisis.
If the show’s fictional city, Pawnee, Ind., is intended to represent an average American city, then a central factor in the crisis likely was the dramatic and growing shortfall in public pension funds. Estimated by some to be as high as $4 trillion nationwide, municipal pension shortfalls could reach as much as $500 billion in California alone. Because public pensions are not regulated by the Employee Retirement Income Security Act and do not enjoy the insurancelike protection of the Pension Benefit Guaranty Corp., municipalities have largely been left in a vacuum, free to make their own choices about vesting, benefits, qualifications and funding. This nonuniform atmosphere has produced several decades of increasingly rich benefits packages, often resulting from negotiations with a municipality’s collective-bargaining units, coupled with a less-than-rigid fiscal approach to paying for those benefits.
