Detroit pension ruling could reverberate to Calif.
By Mary Williams Walsh, New York Times
The ruling by Judge Steven W. Rhodes, who is presiding in Detroit’s bankruptcy case, that public pensions are not protected from cuts could alter the course of bankrupt cities like Stockton and San Bernardino, that had been operating under the assumption that pensions were untouchable.
Stockton’s bankruptcy case, for instance, is further along than Detroit’s, and until Tuesday it seemed likely to leave public pensions fully intact. Stockton sought bankruptcy protection last year and has already filed a plan of debt adjustment with the bankruptcy court in Sacramento. Its plan, which is subject to court approval, would leave city workers’ pensions unchanged: They would continue to accrue benefits at the same rate as they did before the bankruptcy. (A new state law does permit Stockton to provide smaller pensions to workers hired after Jan. 1.)
That is a better deal than workers at bankrupt companies often receive. City leaders based it on the thinking that public workers had already sacrificed enough, given that the plan of adjustment already calls for them to give up contractual pay increases and valuable retiree health benefits.
Opponents of that plan have raised concerns that it would not save enough money. They point to the city of Vallejo, which spent three years in bankruptcy, emerged in 2011 without touching its workers’ pensions, and is again having trouble balancing its budget. Many cities in California are struggling with pension costs because of a big benefit increase in 1999 that has been much more expensive than anticipated.
The ruling on Detroit’s bankruptcy should put fear into all government employees.
Socialism only works until you run out of other people’s money to spend, and the taxpayer is tapped out.
The days of retiring at 50 @ 90% of your pay with healthcare for life for you and your family are gone, long gone.
Government workers are generally overpaid, and they’re going to get haircuts across the country. The alternative is Detroit or Stockton, your choice.
A. B. I’ve been amazed over the years at how government workers think they are more deserving than private sector workers. Private sector workers are 10 times more likely to lose jobs during recession years than government workers. This is actually too little, and too late. We had to be in crisis before a judge would issue this ruling in favor of tax payers. The high government wages and overly generous pensions have been a troublesome problem for over 20 years. What took so long ?
AB
What about those that retired 20 years ago and did not receive those large pensions that are being given now? Should they be penalized also?
I agree that today that there are many Gov. employees that are retiring with very large pensions and many make even more than they did when they were working and should suffer some adjustments but not across the board cuts.
The ones that need to be looked at are the Police and Fire and all Safety positions that receive huge pensions and retire at 50 and then go to work at other jobs and double dip, Many Firemen have other jobs or businesses and they only work 10 1/2 days a month. Those are the things that need to be looked into.
Why shouldn’t gov workers live super well at the taxpayers expense. They earned it fair and square by bribing the politicians. There must be more money inside the dead golden goose.
T. T. O. F. S. When I comment here, I sometimes want to address all aspects of a subject. I don’t address all, because if I did, my strongest points may be overlooked, or go without recognition. My point is that we taxpayers don’t get justice until a crisis hits. The taxpayers rights should not be put aside until crisis. Your point is well taken. I have noticed too, that government employees providing emergency services get preferential treatment in nearly all respects. They get what they want because any persons opposing their compensations are easily attacked with accusations of putting public safety at risk. We out here are often paying more attention to the hidden agendas than you may think. I completely agree with you. If you and myself walked into a city council meeting and said we need to reduce pensions to emergency service personnel, the emergency service people would have their attack strategy ready for us. We would be demonized in less than a minute.