Tag archive for OPEB

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 …

Could Obamacare prevent future municipal bankruptcies?

Yes, but only if liberal judges get out of the way.
Last week, as the media focused most of its attention on the US Supreme Court’s Harris v. Quinn decision and the Vergara ruling in California, the Illinois Supreme Court issued a decision that could …

More autonomy for cities? It’s complicated.

This week’s theme is local government autonomy: should there be more? What are the benefits of state oversight? All week long, Aaron Renn and Steve Lisauskas will be debating the topic…

The benefits leviathan devouring NYC’s budget

Today’s NY Times has a story about poverty and near-poverty levels in the Big Apple.The reporter who wrote the piece asked me what kinds of options the next mayor (there’s an election this fall) would have addressing poverty. Leaving aside the issue of how much …

Michigan cities face huge retiree health care liability

As Steve Eide notes below, post-employment benefits, namely retiree health care promises, make up a big part of Detroit’s debt. But Detroit is not alone. A new study by two Michigan State University fiscal experts finds that 311 of the state’s municipalities representing two-thirds of …

Teachable moment in Detroit: to avoid takeover, cut OPEB

This is an iron law of American government: states don’t like to take over cities. They can–there’s no question about states’ legal right to intervene–but takeovers are high risk, low reward. A receiver or control board cannot, on its own, restore a bankrupt city to …

Is Baltimore Stockton?

Just as state and local governments had begun to show some signs of stability, headlines last week proclaimed that Baltimore was going down. Is this so? Is Baltimore the next Stockton?
As The Wire‘s Stringer Bell notes in the image above, Baltimore has many problems. Some old …

What we mean when we refer to pension and healthcare costs as “unsustainable,” in one chart

This chart is from a report on Baltimore’s Ten-Year Fiscal Forecast, prepared by Public Financial Management, Inc. It was commissioned by the mayor of Baltimore. It speaks for itself.

Retiree healthcare solution: Let Obamacare pay for it!!!

Last week I wrote about a report that called Chicago’s pledge to subsidize the health insurance premiums of retired city workers unsustainable. The program already costs the city $109 million annually and its cost is projected to grow to $540 million in a decade, as the ranks of retirees grows. Now one member of the commission that issued the report has a solution. Let Obamacare pay for it!

Shades of grey: Cities owe big tab for retiree health care

Below I wrote about the Sacramento, Ca., city manager’s recent report on the capital city’s burgeoning debt and noted that perhaps the biggest problem was some $440 million in unfunded liabilities for health care for retirees. The city has put aside nothing to pre-fund those …