A recent headline (May 6) was an attention-getter: “Audit says the dead get state pensions.” Sure enough the Washington state Auditor’s Office has found that the Department of Labor and Industries has been sending checks totaling $255,000 to six dead people. L&I is also accused of paying more than $600,000 to claimants who were not eligible and $1 million to those who may not be eligible. The agency disputes some of the findings.

But there’s another Washington state pension story you probably didn’t see that has much larger numbers, graver implications and a measure of premeditation.

The Associated Press reports that state legislators are beginning to meet to find a way to close the state’s $4.9 billion pension shortfall. State employees will be retiring in large numbers in the coming years, but instead of keeping current with the payments they’re supposed to make into the appropriate funds, lawmakers have skipped some years’ contributions and even enhanced benefits that draw those accounts down.

At the behest of Gov. Chris Gregoire, lawmakers started making up for the shortfall with a $350 million payment during this year’s legislative session. But they punted on an important part of the solution: shedding the “gain-sharing” program adopted in the late 1990s. The lure of the go-go stock market of that time was enough to hook lawmakers on the idea of letting current and future retirees share any investment returns that exceeded 8 percent.

Supporters of gain-sharing said such a permanent perk would pay for itself. Lawmakers bought that line, and now are searching for $900 million to pay for the projected costs of these new benefits. That’s an expensive lesson in naiveté.

Rather than extend the cost of that lesson, the state’s political leaders need to muster the courage to cut the program entirely. Some members of the state pension policy board want to salvage 50 percent of the benefit. But it makes no sense to finance a relatively new benefit when the state cannot keep up with payments on the old benefits.

The good news is that Gregoire appears to be taking a tough stand, even though it could cost her support among state employee unions.

“Far too many of the ideas are still too expensive for me,” she told the Associated Press.

Local governments strapped for money – which is to say all of them – have an important stake in the outcome. They cover about 40 percent of employee pension costs for police officers, firefighters, librarians, park rangers, clerks, maintenance workers, etc.

Gain-sharing was adopted at a time when a soaring stock market entranced lawmakers. It’s time to snap out of it.