The next fiscal crisis

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Mark Moran
Posts: 177
Joined: Wed Jun 22, 2005 7:20 am

The next fiscal crisis

Postby Mark Moran » Thu Sep 11, 2008 8:53 am

http://www.washingtonpost.com/wp-dyn/co ... inionsbox1

This column by George Will is about the looming crisis of municipalities being unable to meet their contractual obligations, especially regarding pension benefits for city workers.

I am wondering if this is an issue that affects Lakewood. I know next to nothing about the topic.


Bill Call
Posts: 3215
Joined: Mon Jun 06, 2005 1:10 pm

*

Postby Bill Call » Thu Sep 11, 2008 12:47 pm

Most city, state and teacher pensions are underfunded. That means that taxes will need to increase by a substantial amount to pay what was promised.

Today's Plain Dealer article on State budget cuts quoted the Governor as saying the federal government needs to help states in financial trouble. That's code for we can't pay the wages and benefits that we promised to pay so please pay it for us.

New York State is faced with a $16 billion dollar budget deficit, California is faced with a $20 billion budget deficit even though both have record amounts of revenue.

This article in City Journal is about New Jersey but it applies to most state and local governments:

http://www.city-journal.org/html/16_2_new_jersey.html

The Lakewood connection is that the schools and City have continued to pile on the pay increases even though revenue is stagnant. Don't look for any real compromises. Government unions have the people by the throat and they won't let go, with our without a fight. See this on Vallejo, California:

http://www.sfgate.com/cgi-bin/article.c ... 11CR8R.DTL

Here is an article that shows some of the salaries paid by the City:

http://seekingalpha.com/article/76534-h ... california

Keep in mind that the median income in this town is under $60,000. Also keep in mind that many city workers are retiring at 50 years of age with close to 80% of salary plus benefits.

I posted something about Vallejo in the Lakewood discusion under the title "Cities Can Declare Bankruptcy" or something like that.

I am all in favor of living wages and decent benefit packages but I guess my idea of decent is a little different than that of Vallejo City workers who complain that they can't get by on $250,000 per year.

Look for New York City and New York State and California to demand the federal government pay the bills. I expect it to happen no matter who is president.

Back in the 70's New York City asked the feds to bail them out and President Ford said no. It was the only smart thing he did as president.

One New York paper ran the headline: Ford to City: Drop Dead. That's still good advice.



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