Pensions play role in Detroit bankruptcy

Pensions play role in Detroit bankruptcy

There are 27 comments on the The Daily Republic story from Jul 21, 2013, titled Pensions play role in Detroit bankruptcy. In it, The Daily Republic reports that:

The news from Detroit should not have come as a surprise to anyone, but there are some consequences that I was totally unaware of.

Join the discussion below, or Read more at The Daily Republic.

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Washington Irving

Sonoma, CA

#1 Jul 23, 2013
Well, what is really true is that the big bosses and the politicians they own are to blame. They want to dump the pensions and medical insurance so that they can set higher prices and charge retired folk for selling them again what they have worked for all their lives. You stupid lickspitlles are playing in their band and singing their praise, hoping for crumbs of thanks from the farting mouths. When they are done with you they will shove some broom up your arse and send you off to sweep away the evidence.....nice job you got, how're the crumbs and bones and empty cups for the kids?
Captain

San Ramon, CA

#2 Jul 27, 2013
Excellent article about Detroit’s Bankruptcy and how that compares to Solano County! According to the author, Bud Stevenson:

“A young man I met who was just starting out with a neighboring police department will have to live on an initial salary of more than $80,000. Those of you who were in high school in the 1950s or 1960s may remember when public service jobs were considered low-paying, dead-end jobs.

That is no longer true, if it ever was.”

- that low end starting salary doesn’t include overtime pay, pension pay, Cadillac healthcare benefits, Cadillac retiree medical benefits, excessive sick leave pay that can be converted into cash or credit for years of service, excessive holiday hours, etc… starting cost of a first year employee is probably north of 140K

“I remember going for a run – slowly, I was more of a plodder – with a former fire official. His pension from, I believe, the city of Fairfield, was starting at $10,000 a month. Our former police chief began his retirement at about $150,000 a year.“Yeah, Bud,” you might be saying,“but you’ve never gone into a burning building to rescue a baby or shot it out with an armed bank robber.” True enough, but neither had the retired chiefs I spoke with.

A late mayor of Fairfield told me it was pretty simple. The public service union, whether police or fire, would tell a candidate,“If you want the union’s money and support, you’ll agree to our contract terms.” The bankrupt city of Vallejo was, and probably still is, spending more than two-thirds of its budget on wages and benefits. That doesn’t leave much for capital projects or improvements.”

- same story that can be written about most cities in this state, including the state itself.

“We, meaning Solano County, have witnessed the consequences of terrible financial management with the bankruptcy of the city of Vallejo. Fortunately, it does not seem to have infected any of the other cities in Solano, or the county itself. On the other hand, most of us are aware that the salaries and pensions awarded to public safety officials are among the most generous in the country.”

- Bud Stevenson drops the ball here. He needs to do more homework! The media has been slow to understand the issues related to compensation, pensions, and retiree medical costs. Even then, and now, many still do NOT understand the magnitude of the problem. If Mr. Stevenson thinks the county is in good shape I'd encourage him to dig deeper (including the costs of pension obligation bonds - which make even the overwhelming pension debt appear smaller than what it actually is).
SMITHMAN TPARTYSEBASTOPOL

Sonoma, CA

#3 Jul 27, 2013
Stop calling us Reichspublicans you liberal fairies. When all is said and won then we can sell this whole tamale back to you at whatever rate we want and we will all be rich except you. Smell them pickles.
Captain

San Ramon, CA

#4 Jul 27, 2013
If you want to understand the magnitude of the problem regarding underfunded pensions and unfunded retiree medical benefits this is a good place to start: http://www.pensiontsunami.com/
Miss W and Mr W

Sonoma, CA

#5 Jul 28, 2013
The problem is huge. It is your fault. If you only believed in God's grace, as he rightly asks, then you wouldnt need or want all this health, retirement, subsidy, protections, unions, and free food nonsense. Read the BIBLE become enlightened as to his word and so set yourself free from these godless demands. PRAY.
Wrong Again

Vacaville, CA

#6 Jul 28, 2013
Detroit went bankrupt because over 200,000 people left the city which lowers tax income, and major major businesses left. Detroit was doing fine before those happened. so stop blaming employees and blame the economy and stupidy of not making changes
Down With Brown

Vallejo, CA

#7 Jul 28, 2013
It is essential for Vallejo to start making money. We cannot take comfort in continued employee cost reductions to balance our budget. The main problem is the present majority encourages wide community input, meetings, etc. to develop a vision. Council persons should distill input from their constituents to expedite governance, not advocate for meetings, committees, and other mechanisms that slow down progress. Progressive? Hardly. We are sure to suffer more economic slide unless we install pro-business and pro-safety concillors. Safety of the city is the key to rebuilding confidence to either move here or start a business. The city is not now safe, ranks high in national and state crime statistics, and is nationally known as a "miserable city".
Enough is enough!
No more Gomers in charge. They simply cannot grasp reality.
We need jobs for our community!
Build wealth, vote Filipino slate!!
Spamtard

Concord, CA

#8 Jul 28, 2013
Down With Brown wrote:
It is essential for Vallejo to start making money. We cannot take comfort in continued employee cost reductions to balance our budget. The main problem is the present majority encourages wide community input, meetings, etc. to develop a vision. Council persons should distill input from their constituents to expedite governance, not advocate for meetings, committees, and other mechanisms that slow down progress. Progressive? Hardly. We are sure to suffer more economic slide unless we install pro-business and pro-safety concillors. Safety of the city is the key to rebuilding confidence to either move here or start a business. The city is not now safe, ranks high in national and state crime statistics, and is nationally known as a "miserable city".
Enough is enough!
No more Gomers in charge. They simply cannot grasp reality.
We need jobs for our community!
Build wealth, vote Filipino slate!!
The mentally ill Sam Kurshan has spoken
A Thought

Vacaville, CA

#9 Jul 28, 2013
Miss W and Mr W wrote:
The problem is huge. It is your fault. If you only believed in God's grace, as he rightly asks, then you wouldnt need or want all this health, retirement, subsidy, protections, unions, and free food nonsense. Read the BIBLE become enlightened as to his word and so set yourself free from these godless demands. PRAY.
Like the bible; god is fiction.
Anon

Vallejo, CA

#10 Jul 28, 2013
One out of 3 residents is in poverty; more than half of all children in the city are impoverished.

Between 2000 and 2010, Detroit lost a quarter of its population as the middle-class and whites fled to the suburbs.

That left it with depressed property values, abandoned neighborhoods, empty buildings, lousy schools, high crime, and a dramatically-shrinking tax base. More than half of its parks have closed in the last five years. Forty percent of its streetlights don't work.
anon

Vallejo, CA

#11 Jul 28, 2013
Anon wrote:
One out of 3 residents is in poverty; more than half of all children in the city are impoverished.
Between 2000 and 2010, Detroit lost a quarter of its population as the middle-class and whites fled to the suburbs.
That left it with depressed property values, abandoned neighborhoods, empty buildings, lousy schools, high crime, and a dramatically-shrinking tax base. More than half of its parks have closed in the last five years. Forty percent of its streetlights don't work.
Sounds like "pensions role" was very minor compared to the hit their GF took by way of tax base loss. Of course the Gomers all think it could have been avoided by simply cutting "total compensation" LMAO
Wrong Again

Vacaville, CA

#12 Aug 5, 2013
people fled to the suburbs which means something else moved in
General Schivley

Vallejo, CA

#13 Aug 5, 2013
seen it

Vallejo, CA

#14 Aug 5, 2013
General Schivley wrote:
just like vallejo. decades of incompetence.
Anonymous

Kent, WA

#15 Aug 5, 2013
seen it wrote:
<quoted text>just like vallejo. decades of incompetence.
Past practices in Vallejo. Today it is no longer the case. There is finally a city management team in place and people on council who can and will say no to bad things. Let's see if the new crop of candidates are willing to stay on the striaght and narrow, but long, course of recovery currently chartered.
What do you think each candidate will do. Return to spending is requested, or continue to know how to say NO!
Captain

San Ramon, CA

#16 Aug 5, 2013
anon wrote:
<quoted text>
Sounds like "pensions role" was very minor compared to the hit their GF took by way of tax base loss. Of course the Gomers all think it could have been avoided by simply cutting "total compensation" LMAO
18 Billion in debt and 9.2 Billion is do to pension/retiree medical. Obviously the declining population played a role but the biggest issue regarding Detroits bankruptcy is unfunded pension/retiree healthcare costs.
Anon

Concord, CA

#17 Aug 5, 2013
Captain wrote:
<quoted text>
18 Billion in debt and 9.2 Billion is do to pension/retiree medical. Obviously the declining population played a role but the biggest issue regarding Detroits bankruptcy is unfunded pension/retiree healthcare costs.
"Unfunded liability" will always be with us. They do not cause bankruptcy. Social Security has a $8.6 trillion unfunded liability. That is dwarfed by the $107 trillion Medicare unfunded liability.

Detroits problem was lack of jobs and tax revenue and not unfunded liability.
early bird

Vallejo, CA

#18 Aug 6, 2013
this "unfunded liability" term is generic to anyone that has a mortgage or other loan as well. our problem is compounded by lack of revenue. the council majority now has and will continue to say no to revenue producing development that is in conflict with their ideology.
Captain

San Ramon, CA

#19 Aug 6, 2013
Anon wrote:
<quoted text>
"Unfunded liability" will always be with us. They do not cause bankruptcy. Social Security has a $8.6 trillion unfunded liability. That is dwarfed by the $107 trillion Medicare unfunded liability.
Detroits problem was lack of jobs and tax revenue and not unfunded liability.
""Unfunded liability" will always be with us. They do not cause bankruptcy."

Your comments are ridiculous.

If unfunded liability will always be with us, whichh means taxpayers will always be stuck paying more for past service, then you are making the argument for the switch to a defined contribution plan for all public employee union members.

"They do not cause bankruptcy."

- Unfortunately they do. Unfunded liabilities had less to do with the Vallejo bankruptcy then just plain old bad fiscal management. Past councils had provided raises and enhanced pension plans that the city couldn't afford. It was the combination of excessive raises and enhaanced pension benefits that drove Vallejo to bankruptcy. The recession that can be attributed to other cities finacial downfall had absolutely nothing to do with Vallejo becoming the first CA city in decades to file bankruptcy - because Vallejo was bankrupt before the recession hit.

The reason: bad employee contracts that included pension formula enhancements and outrageous raises that the city could never afford.
Captain

San Ramon, CA

#20 Aug 6, 2013
early bird wrote:
this "unfunded liability" term is generic to anyone that has a mortgage or other loan as well. our problem is compounded by lack of revenue. the council majority now has and will continue to say no to revenue producing development that is in conflict with their ideology.
"this "unfunded liability" term is generic to anyone that has a mortgage or other loan as well"

- Bird, you don't really have a clue as to what your talking about. Have a nice day.

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