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Municipal bankruptcy is about cutting retiree healthcare

Rhodes: OPEB is unsecured. Unlike retiree pensions, it had “no arguable constitutional protection.”
— ChristineFerretti_DN (@cferretti_dn) November 7, 2014

The real crisis in journalism now is reporters being tasked by editors to identify “precedents” in Detroit, Stockton, and other bankrupt cities. Because each case appears unique when …

Election 2014 in California: Where were the issues?

Californians may have just experienced the sleepiest election cycle in the state’s history. Only 30% of registered voters turned out; 40% of registered voters did not even know Governor Jerry Brown would be on the ballot for re-election.
The contest between Governor Brown (D) and his …

Colorado court: Things go better without COLA

Something that initially escaped my attention. The Colorado Supreme Court recently restored a measure of fiscal sanity to public sector retirement law in the Centennial State by reversing a Court of Appeals ruling which said that the state could not cut cost-of-living adjustments to help …

Organized labor in Michigan: the dog that didn’t bark

While Governor Snyder and Michigan Republicans are pleased with their victories, the real lesson in this year’s election cycle is about the dog that didn’t bark, let alone bite. This was a terrible year for unions in Michigan. Not only did the candidates favorable to …

Stockton bankruptcy Part Two not great, but not terrible

After federal bankruptcy Judge Christopher Klein gave his verbal ruling early this month in the Stockton bankruptcy case, it was the first time in ages that California’s pension reformers had something to celebrate. Klein ruled that pensions can be impaired in a bankruptcy, defying the …

CA: Public sector environmentalists vs. jobs

110624-farm-drought-hmed-245a.grid-6x2On Saturday I observed in the WSJ that private and public unions were increasingly in conflict this election season, particularly as left-leaning public union leaders align with members of the Democratic coalition like environmentalists, whose no-growth economic policies cost blue-collar workers jobs. One example I didn’t discuss in that piece is a campaign transpiring in California…

Breaking: pensions are unnecessary to attract good teachers

On a dollar for dollar basis, there’s much more risk involved in compensating a worker via a long term pension promise instead of salary or some other benefit expensed in the present. You know for certain how much money you have to spend now. You …

California: Premium pay for ordinary duties

The LA Times has a follow-up story on the August vote by the Calpers board to approve 99 categories of additional pay that government employees in the Golden State can use to boost the amount of their salary that counts toward their final pension. While the major import of the story is the way Calpers undermined modest pension reforms signed into law in 2012, it’s fascinating to see just what kinds of tasks earn government workers “premium” pay…

Why public pension plans are left unfunded

Public pension plans remain massively underfunded, but the standard explanations of the problem-egregious benefits, loopholes and abuse – are the effects, not the root causes, of failures that run much deeper. Pliable accounting rules and weak or non-existent funding mandates are what truly jeopardize the …

Warren Buffett: Call your city council

Warren Buffett might be considered one of the world’s savviest investors, but his warnings aren’t being heeded in his own hometown. Buffett has called the public pension nightmare a “gigantic financial tapeworm” eating away at city and state finances, and he’s criticized funds for their optimistic investment assumptions. His own Berkshire Hathaway uses a modest 6 percent annual projected return on investments in its own pension funds…