Public Pensions, Once Off Limits, Face Budget Cuts

[alp227]

When an arbitrator ruled this month that Detroit could reduce the pensions being earned by its police sergeants and lieutenants, it put the struggling city at the forefront of a growing national debate over whether the pensions of current public workers can or should be reduced.

Conventional wisdom and the laws and constitutions of many states have long held that the pensions being earned by current government workers are untouchable. But as the fiscal crisis has lingered, officials in strapped states from California to Illinois have begun to take a second look, to see whether there might be loopholes allowing them to cut the pension benefits of current employees. Now the move in Detroit — made possible, lawyers said, because Michigan’s constitutional protections are weaker — could spur other places to try to follow suit.

“These things do tend to be herd-oriented,” said Sylvester J. Schieber, an economist and consultant who studies pensions.

The mayors of some hard-hit cities have said that the high costs of pensions have forced them to lay off workers: Oakland, Calif., laid off one-tenth of its police force last year after failing to win concessions on pension costs.

Full story: http://www.nytimes.com/2011/04/26/us/26pensions.html

[rfranklin]

1. this is outright theft...

the time to resist is now.

[hack89]

2. Rhode Island has only funded 59% of their 11.5 billion pension liability.

we also have a $788 million retiree health care liability with no money put aside for it.

I can't see where the money is going to come from. It is hard to imagine there won't be cuts in benefits.