Judge: Detroit can proceed with bankruptcy -> Pension cuts are on the table

[unokitty]

Detroit is not alone

The City of Detroit is probably the best-known example of a municipal bankruptcy, but distressed local governments in California and Alabama also recently sought relief through Chapter 9 of the U.S. Bankruptcy Code.

There have been approximately 660 Chapter 9 filings nationwide since 1937...

Reasons for filing vary but often include troubled public development projects, unanticipated hefty legal judgments against a taxpayer-backed entity, or massive pension and bond debt payments that leave a municipality unable to cover operating costs of employee salaries, vendor payments and other expenses.

In a monthslong investigation, released in August, the Better Government Association closely reviewed the finances of 217 police and fire pension funds in suburban Cook County.

... the collective unfunded liability of those pension funds is $3.3 billion, BGA Rescuing Illinois research determined. Moreover, dozens of the funds are in immediate financial peril.

Municipal leaders have told the BGA they’re looking to state lawmakers to reform the local police and fire pension systems, easing their financial burden, but a legislative fix doesn’t appear imminent.

Meanwhile, the debts keep mounting...

Rockford’s unfunded pension and post-employment benefit liabilities increased 15 percent to $217.4 million in 2013, from $188.8 million in 2008, even as the city’s pension contributions increased, records show.

The same story is playing out across Cook County, where municipal fire and police pension debt is spiking, even as governments dump more cash into the systems, leaving less to spend on parks, roads and other important assets.

Don't have to be a weatherman to know which way the wind blows...

Uno

 

[waggy]

Detroit is not alone



Don't have to be a weatherman to know which way the wind blows...

Uno

Yeah. ILL is pretty fucked up. The state is so fucking mismanaged its funny. Not to mention the levels of corruption is flat out amazing. the only solution people have is raise taxes. great idea..

Those that can are moving out of state. IF this continues "Chicago land" is going to be renamed "Detroit 2"

 

[Mai72]

Raise taxes too much and you're going to face a lot of angry people. Also, it's going to be political suicide.

I don't know what the answer is. In NJ, we are having the same issue. The teacher's pension has been wiped out. Police are retiring at 55 with entitlements that are going to be difficult to pay. The only solution is to scale back the entitlements which a lot of union members are against. The other solution is to raise the taxes to new highs, but who is going to do that?

 

[JEDI]

Raise taxes too much and you're going to face a lot of angry people. Also, it's going to be political suicide.

I don't know what the answer is. In NJ, we are having the same issue. The teacher's pension has been wiped out. Police are retiring at 55 with entitlements that are going to be difficult to pay. The only solution is to scale back the entitlements which a lot of union members are against. The other solution is to raise the taxes to new highs, but who is going to do that?

do nothing. kick the can down the road till u cant anymore.

the Politians in office the year the pensions go bankrupt will be fvcked.

but until that day comes, its 'ni win' to deal w/it so leave it alone.


oh wait.. u said the teachers pension has been wiped out *already*.
what happened? what was the fallout?

 

[fskimospy]

Raise taxes too much and you're going to face a lot of angry people. Also, it's going to be political suicide.

I don't know what the answer is. In NJ, we are having the same issue. The teacher's pension has been wiped out. Police are retiring at 55 with entitlements that are going to be difficult to pay. The only solution is to scale back the entitlements which a lot of union members are against. The other solution is to raise the taxes to new highs, but who is going to do that?

The real issue was chronic underfunding of the pensions for years. At this point it seems like some benefits will have to be cut though, especially after Christie reneged on his obligations to the fund this last year.