Pole: If a city goes into bankruptcy,....

[SanJoaquinSooner]

should the pension benefits of either retired city employees or current city employees be on the table? Or should they be safe from the creditors?

[RUSH LIMBAUGH is my clone!]

Said city should immediately halt Light Rail construction. What a colossal waste of money that is. Next thing they should do is fire people who aren't in the businesses of police, fire prevention, roads maintenance and construction and other(if any other)vital activities.

Also, no other govt. entities should be allowed to bail them out. especially not the federal govt.:nightmare:

[RUSH LIMBAUGH is my clone!]

Yes, they should probably cut pensions some, as well as the other stuff.

[SanJoaquinSooner]

Not sure what your reference to light rail is about.

[SoonerStormchaser]

Where's the ****ing poal?

[RUSH LIMBAUGH is my clone!]

Not sure what your reference to light rail is about.Here in PHX the idiots have spend staggering sums putting in Light Rail, and of course it only serves a small part of the city. It gets very little usage, operating deep into the red, and now THE FOOLS ARE BUILDING MORE!

[RUSH LIMBAUGH is my clone!]

Where's the ****ing poal?What cuts should be made in city government, anywhere, as a beginning to move toward governmental fiscal sanity?

[FaninAma]

They just need to go to Bernanke at the Fed and have him magically print the money needed to cover the deficits. There will be absolutely no long term consequences to doing that.

[RUSH LIMBAUGH is my clone!]

They just need to go to Bernanke at the Fed and have him magically print the money needed to cover the deficits. There will be absolutely no long term consequences to doing that.any city or govt. entity, or private business as well, that is bailed out by the US govt. or any of its agencies is, in effect, part of that very problem.

[FaninAma]

any city or govt. entity, or private business as well, that is bailed out by the US govt. or any of its agencies is, in effect, part of that very problem.
I fully expect the Fed to start buying city and state government bonds like it is with US Treasuries. Remember, you heard it here first.

[KantoSooner]

should the pension benefits of either retired city employees or current city employees be on the table? Or should they be safe from the creditors?

I would expect that it would depend on whether the pensions were fully funded or designed to be paid on a pay-as-you-go basis. And I would look to see about whether they were individuated and vested. Current employees are most likely toast unless they've got a union contract that can somehow get blood from a turnip.

[RUSH LIMBAUGH is my clone!]

I fully expect the Fed to start buying city and state government bonds like it is with US Treasuries. Remember, you heard it here first.just like printing new money. Fool's gold, in the long run.(The big question is, how long is the long run?)

[FaninAma]

Government employees should be treated just like employees in the private sector. If the pension fund is not fully funded and self-sustaining the retirees should take a hit just like they would if they worked for a private company.

[cleller]

Government employees should be treated just like employees in the private sector. If the pension fund is not fully funded and self-sustaining the retirees should take a hit just like they would if they worked for a private company.

What about if the government in question has been monkeying around with the system? As in, taking money from one well-funded pension system to shore up another? I think this happened in Oklahoma when Brad Henry was governor, taking money from the police pension system and giving it to teachers. After that, if memory serves, a state question was voted on, and passed to stop the practice.

As of 2011 the police pension system was 93% funded, the teacher's system 56% funded.

[Midtowner]

Here in PHX the idiots have spend staggering sums putting in Light Rail, and of course it only serves a small part of the city. It gets very little usage, operating deep into the red, and now THE FOOLS ARE BUILDING MORE!

What a strange way to look at public transit. If you wanted to look at our road/highway/interstate system through that same lense, we're trillions in the red and keep building more.

Funny thing, that. Public transit is a core role of the government for a major city like Phoenix. They build light rail because doing so is a huge economic enhancement and a great driver for development. With light rail, it's absolutely true that if you build it, they will come.

Dallas has experienced a huge building boom because of the DART. Phoenix will do the same if they continue to build.

[trwxxa]

Everything is on the table. In this case, the city should have some ability to renegotiate the benefits for the currently retired and change the program for the current workers, such as working more years and increasing the worker contribution into the system.

[KantoSooner]

However the legalities work out on this, pay as you go is a horrible way to fund anything. We should drop all private pension plans and social security in favor of the Singaporean system: X% of an employees salary is withheld month and matched 150% X by the employer. This money (now 250% X) goes into an account with the indivudal's name on it. It's mostly locked away until retirement age.
Thus, everybody has something to retire upon and you never need worry about profligate politicians or idiotic bosses blowing your old age security.
To fully switch us over would take something like 40 years and would hurt some. But you could do a blended system until some cutover date in the future to minimize the pain and keep benefits for current and soon to be retirees.
And then we'd have no more debate over portability of pension, government borrowing of SS moeny and all that raft of other issues. At a stroke, we'd increase the security and mobility of American workers, create a huge pool of capital (thus lowering interest rates and improving access to capital for businesses) and resolve all questions of SS long term viability. We'd also be able to cut several hundred thousand people off the government payroll, resulting in lower government cost and greater productivity for our economy as a whole.

[SoonerorLater]

This one of the toughest issues for me to come to grips with. I realize there are many retired government employees that are drawing absurdly outsized pensions. The trouble I have with it is it's like changing the rules after the game has been played for retirees. That being said there is no way mathematically all of this is going to work out without a lot of pain. A lot of pain. The pension systems in America are underfunded and future returns are overestimated. The Fed will not be able to inflate their way out of this mess without blowing up the monetary system. The economic future will not be pretty for people who relied on the promises of politicians and bureaucrats.

[SanJoaquinSooner]

I would expect that it would depend on whether the pensions were fully funded or designed to be paid on a pay-as-you-go basis. And I would look to see about whether they were individuated and vested. Current employees are most likely toast unless they've got a union contract that can somehow get blood from a turnip.

In California, it is not fully funded. Cities pay into a state Calpers system, which is mandated by the state constitution. So the battle may be state constitution vs. federal bankruptcy law. Bond holders are yelling foul! that they get screwed while pension plans are untouched.

Here is part of an article about it:


In California, the only precedent is in the city of Vallejo, which declared bankruptcy in 2008. Unlike Prichard and Central Falls, which had their own pension plans, Vallejo is part of a state-run system. It kept making all of its contributions to Calpers throughout its three-year bankruptcy.

“We never shortchanged Calpers,” said Robert V. Stout, Vallejo’s finance director at the time.

Mr. Stout said he had expected to renegotiate the city’s retirement plans in bankruptcy, since everything else was on the table. At the time, Vallejo was in a fiscal tailspin with the mortgage debacle, which hit cities in California unusually hard.

But Calpers drew a line in the sand, warning Mr. Stout and his lawyers that in California, public pensions can be increased but never decreased, not just for retirees, but also for workers at midcareer.

What if the city is bankrupt and cannot afford it?

“They made it quite clear that they take that law very seriously,” Mr. Stout said. Calpers also warned that if the bankruptcy judge ruled that the state pension laws stopped at the federal courthouse door, Calpers would appeal, and make Vallejo pay its legal bills.

“We interpreted that as, ‘If we try, they’ll fight us through the courts forever,’ ” Mr. Stout said. He and Vallejo’s lawyers decided the city couldn’t afford it.

The city ended up cutting services sharply, gutting its retiree health plan, adding a 1 percent sales tax and cutting payments on its bonds. But its police officers and firefighters still qualify for full retirement at 50, and other city workers at 55.

Since Vallejo made no effort to cut pensions in bankruptcy, the legal issues remain untested, said Mr. Spiotto, the Chapter 9 lawyer.

“It’s something that’s in the process of being worked out, not only in California, but in every state,” he said. “It’s a global issue.”

A Calpers spokeswoman responded to questions by providing a 20-page position paper on the laws that protect public pensions in California. The report did not mention bankruptcy but acknowledged that some California cities were struggling.

“It will be vitally important for all interested parties to heed the legal rules protecting the vested rights of Calpers’s members,” the paper said. Challenges “may lead only to additional litigation and administrative costs.”

[RUSH LIMBAUGH is my clone!]

However the legalities work out on this, pay as you go is a horrible way to fund anything. We should drop all private pension plans and social security in favor of the Singaporean system: X% of an employees salary is withheld month and matched 150% X by the employer. This money (now 250% X) goes into an account with the indivudal's name on it. It's mostly locked away until retirement age.
Thus, everybody has something to retire upon and you never need worry about profligate politicians or idiotic bosses blowing your old age security.
To fully switch us over would take something like 40 years and would hurt some. But you could do a blended system until some cutover date in the future to minimize the pain and keep benefits for current and soon to be retirees.
And then we'd have no more debate over portability of pension, government borrowing of SS moeny and all that raft of other issues. At a stroke, we'd increase the security and mobility of American workers, create a huge pool of capital (thus lowering interest rates and improving access to capital for businesses) and resolve all questions of SS long term viability. We'd also be able to cut several hundred thousand people off the government payroll, resulting in lower government cost and greater productivity for our economy as a whole.Sounds doable. How do we prevent the foxes from guarding the hen house?

[KantoSooner]

If you mean how do you prevent the government from dipping into these accounts, I suppose you really can't, ultimately. What Singapore does is to have ATM style kiosks where you can go punch in your name and pin number and get a print out of where you stand. You can do it multiple times a day if you're OCD about it. So tampering would be seen and a stink could be raised.

Basically, you're allowed to allocate your pension funds to CD's, straight savings account or a short list of approved stocks and bonds. Highly conservative. The whole thing is managed and accounting done by a rotating panel drawn from the major local banks and accounting firms. It's like serving jury duty for them, so they have every interest in keeping it simple.

What it doesn't do is anything redistributive. The CEO gets the 250% X he's been putting away for 40 years or so....and so does the cabby. The difference is that the CEO's 'base' is a lot bigger than the cabby's so the dollar value of the CEO's 'X' is concomittantly bigger as well. Still, no one gets old without at least a bit saved up.

[Tulsa_Fireman]

Or in lieu of a defined contribution program like that, stay with defined benefit pensions and limit the outlandish rewards at the end of service.

Full medical? 100% of rate after 20 years service? It's a retirement program, not a rape the coffers party. It's ridiculous. And sadly, those overinflated benefits shine a negative light on defined benefit programs across the U.S. that are working hard to do things right and stay solvent. Programs that DON'T puke benefits for 40 plus years at 100% levels.

[Sooner5030]

This one of the toughest issues for me to come to grips with. I realize there are many retired government employees that are drawing absurdly outsized pensions. The trouble I have with it is it's like changing the rules after the game has been played for retirees. That being said there is no way mathematically all of this is going to work out without a lot of pain. A lot of pain. The pension systems in America are underfunded and future returns are overestimated. The Fed will not be able to inflate their way out of this mess without blowing up the monetary system. The economic future will not be pretty for people who relied on the promises of politicians and bureaucrats.

I kinda feel the same way. I may not agree to the promises made but once they are agreed to then those folks made decisions based on those promises. It's been awhile since I had to deal with the priority of debts (payables vs debt investors vs equity investors) but I do think that their pensions should be treated as a payable and placed ahead of the debt and equity investors during liquidation.

[8timechamps]

Or in lieu of a defined contribution program like that, stay with defined benefit pensions and limit the outlandish rewards at the end of service.

Full medical? 100% of rate after 20 years service? It's a retirement program, not a rape the coffers party. It's ridiculous. And sadly, those overinflated benefits shine a negative light on defined benefit programs across the U.S. that are working hard to do things right and stay solvent. Programs that DON'T puke benefits for 40 plus years at 100% levels.

Not a bad idea, and something that all state governments should consider. However, they have to be careful not to cut themselves out of the competitive marketplace for employees. Some of the people that can help the various governments out of the mess they are in won't stick around in an unequal environment.

To add to the discussion, NO retirement plan should be raided to make up for the miss-steps of local/state governments. There are literally thousands of places to make cuts, and you don't screw with folks retirement benefits.

[jkjsooner]

In an ideal world we should make good on all pension promises. People may have worked 40 years at a job that pays much less than what they would make outside government because of the promised pension. When I did summer work at an Oklahoma state park in college a lot of the full timers said they had higher paying jobs elsewhere but went to work for the state for the benefits and retirement plans.

In the real world money doesn't grow on trees (at least not for state and local governments) so the money may not be there. In that case I think those with pensions should get priority but should also take a cut but never lose more than 25% or so of their benefits.

I think pensions should be fully funded and completely off-limits to corporations or governments.

[Bourbon St Sooner]

What a strange way to look at public transit. If you wanted to look at our road/highway/interstate system through that same lense, we're trillions in the red and keep building more.

Funny thing, that. Public transit is a core role of the government for a major city like Phoenix. They build light rail because doing so is a huge economic enhancement and a great driver for development. With light rail, it's absolutely true that if you build it, they will come.

Dallas has experienced a huge building boom because of the DART. Phoenix will do the same if they continue to build.

DART makes sense because Dallas has a large central business district where thousands of people work. The downtown in Phoenix is tiny and people work all over the city. There's no critical mass where people work in a small area.

[badger]

I think the problems could be solved in a series of state questions. Please hear me out! Even though we voted in the elected officials, they remain as unpopular as ever, yet after a mere 6 years in Oklahoma elected office, they are eligible for full retirement pension.

Let us question this thing that makes absolutely no sense. Let us state question this thing :)

1- Should elected officials be eligible to receive state pensions if the state pension systems for police, fire and teachers are not fully funded by the end of the fiscal year?

2- Should elected officials be eligible to receive raises if the state pension system for police, fire and teachers are not fully funded by the end of the fiscal year?

3- Should any pension system for teachers, police or fire be cut back or transferred to a 401K, should elected officials retirement plans face the same changes?

Basically, we have a system where elected officials can give themselves big retirements for only a few years of "work." Since we all know they will never approve a pay nor retirement cut on themselves, let's just work around them via a few state questions :D

If the elected officials are forced to take state employee retirements as seriously as their own, perhaps we'll have a fully funded pension system for teachers before too long?

[badger]

I think the same logic could be applied to the city question --- these elected officials gave themselves all the perks of being in charge of taxpayer money, from the retirement plans to the vacations (errrrr, I mean educational seminars that just happened to be in Hawaii). Make it clear, MAKE IT LAW that if these pension plans die, get cut back or changed in any way, the elected officials retirement plans will suffer the same fate.

It's time to hold em accountable :)

[RUSH LIMBAUGH is my clone!]

DART makes sense because Dallas has a large central business district where thousands of people work. The downtown in Phoenix is tiny and people work all over the city. There's no critical mass where people work in a small area.at no time that I know of has there been a Phoenix Light Rail car with enough people in it to operate in the black. It's a preposterous, unbelievable expense they undertook, and are planning to build more.

[BigTip]

Said city should immediately halt Light Rail construction. What a colossal waste of money that is.

Soooooo true.
All city council members want to live in Disneyland. "Look how cool my city is!"
I'm not sure of the exact numbers, but when I saw the price tag of Austin's proposed (now a reality) rail system, I figured that amount of money could buy 200 more city buses and pay bus drivers for 30 years to operate them all. But who wants flexible, sensible buses that can go to any part of the city when you can have gleaming trains running on 32 miles of rail?

[SCOUT]

Fiscal responsibility applies to cities too. If a city has to file bankruptcy, it is because they spent money based on projected revenue. They should be held accountable for that mistake. I think pensions should be funds that in the category of last resort, but all things are on the table. Is it fair to those retired? Not to the people who depend on those pensions it isn't. Is there someone at fault? Yes, those who spent that money and screwed those retirees.

Our problem is that the people who "stole" that money aren't in office any more and the rest of us have to pay the piper. I wish the American people had the ability, and of course willingness, to look beyond the next six weeks when considering political topics.

[RUSH LIMBAUGH is my clone!]

Soooooo true.
All city council members want to live in Disneyland. "Look how cool my city is!"
I'm not sure of the exact numbers, but when I saw the price tag of Austin's proposed (now a reality) rail system, I figured that amount of money could buy 200 more city buses and pay bus drivers for 30 years to operate them all. But who wants flexible, sensible buses that can go to any part of the city when you can have gleaming trains running on 32 miles of rail?exactly! This applies to practically everywhere they idjuts do that. This insanity ties in with spending taxpayers' dollars on funding solar and wind energy companies that go ti*'s up to the tune of millions or more dollars. All in the name of bedowngrading the useage of fossil fuils, since they CAUSE GLOBAL WARMING, ER AH CLIMATE CHANGE, DON'T THEY?