Pension Legacy Threaten Communities

Posted by Carol Coletta on October 14, 2009

From the Baltimore Sun comes this sickening and all-too-frequent news:

City fire and police pensions: Heads we win, tails taxpayers lose

"There are plenty of problems with Baltimore's fire and police pension system, but probably the most egregious is an unusual benefit retirees there receive. When the stock market does well and the pension fund grows by more than 7.5 percent, retirees get a share of that extra money -- every year for the rest of their lives. When the stock market does poorly and the pension fund doesn't grow -- or, as in recent years, declines in value precipitously -- they don't get additional increases, but they still get the bonus payments determined when times were good. That gives retirees all the up-side of the stock market and none of the downside, an enviable, but unsustainable, position.

"What's the impact? To keep up, the city would need to double its contribution to the retirement system this year and cough up $165 million at a time when it is already furloughing employees, cutting services and facing more revenue shortfalls to come. To pay for this benefit, city property tax rates would have to go up by almost 25 cents per $100 in assessed value."

What are citizens expected to do, when their own jobs are being eliminated and their pay cut?  Burden them with enough of this crap, and they will revolt.  And the talent you need to power you economy, those with options about where they live, won't come.

Every single top official and every member of the negotiating team of Administrations who cut these deals ought to be consigned to live in the city forever, along with their children and their children's children.  So should the employees who receive these ridiculous pay-outs.  This is outrageous, and it happens way to often.