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If You're A Chicago (Or New York) Taxpayer, Move To D.C.

Tyler Durden's picture




 

Thirty cities at the center of the nation’s most populous metropolitan areas faced more than $192 billion in unpaid commitments for pensions and other retiree benefits, primarily health care, as of fiscal 2009. Pew notes that these cities had 74 percent of the money needed to fully fund their pension plans but only 7.4 percent of what was necessary to cover their retiree health care liabilities. Cities typically count on investment earnings from their pension funds to cover two-thirds of benefits. During the Great Recession, though, returns were lower than expected, and unfunded pension liabilities grew in nearly all of the cities. Even cities with well-funded systems struggled to keep up their yearly contributions as local tax revenue plummeted during the recession, and while pension assets have largely returned to pre-recession levels, they still must make up for years of lost growth, as liabilities continue to rise. So pressure for reforms is not expected to lessen. New York and Philadelphia may have the largest unfunded liability per household, but it is Chicago and Pittsburgh that have the lowest funding levels for pensions and the lowest retiree health care funding levels - while Washington D.C. tops the list in both. Benefits down, taxes up.

 

Via The Pew Research Center,

Overall, the 30 cities, which are the focus of Pew’s American cities project, had 74 percent of the money needed to fully fund their pension plans over the long run...

 

but only 7.4 percent of what was necessary to cover their retiree health care liabilities as of fiscal 2009, the latest year with data available for all pension plans of all 30 cities...

Unfunded pension and retiree health care obligations pose a significant concern for city budgets. Although these unpaid bills are not due immediately, they limit policymakers’ ability to invest in other priorities because they place a claim on future revenue. Every dollar that goes to plug a hole in a city’s retirement funds is a dollar that cannot be spent on education, public safety, libraries, and other services. The longer unfunded liabilities go unaddressed, the larger the bill facing future city budgets and taxpayers. To shore up retirement funds, local officials may have to cut services, reduce the workforce, or raise taxes. Cities also can pay a price through higher borrowing costs because credit rating agencies incorporate unfunded retirement costs into their analyses.

Localities have employed a variety of strategies to address their growing retirement liabilities, including increasing the retirement age or vesting periods and putting larger amounts of municipal revenue into pension funds. Some cities are pushing to cut cost-of-living increases to retirees or are asking current workers to contribute more money to their own retirement benefits. Most reforms, however, affect only new hires, which does nothing to reduce the sum of unpaid bills.

 

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Sun, 03/10/2013 - 17:58 | 3317828 10mm
10mm's picture

Nothing new here.They will take hair cuts or nothing, like Rhode Island did to CURRENT retires.

Sun, 03/10/2013 - 18:00 | 3317833 SolidSnake961
SolidSnake961's picture

I aint paying shit, fuck you overpaid public "servants"

Sun, 03/10/2013 - 18:13 | 3317854 Troll Magnet
Troll Magnet's picture

no shit. everyday in every way we get raped by these blood-sucking govt employees. FUCK OFF AND DIE ALREADY!

Sun, 03/10/2013 - 19:11 | 3317955 Ray1968
Ray1968's picture

As a Chicago resident, I feel sorry for the workers who were promised benefits and worked hard to fulfill their end of the bargain.... but FUCK! who's going to pay the bill? We deserve the government we get?? When the lowest common denominator elects our government we are screwed.

FUCK THEM ALL.

Sun, 03/10/2013 - 19:32 | 3317993 otto skorzeny
otto skorzeny's picture

don't feel sorry for these fuckers-most of them are relatives or juiced-in or affirmative action bullshit and they knew going in it was a screw-off job so fuck 'em. also-if you are from Chicago or any N IL union town you know these guys don't do shit to earn their $.

Sun, 03/10/2013 - 20:57 | 3318066 Fredo Corleone
Fredo Corleone's picture

An overwhelming majority of state, county and municipal jobs are in essence sinecures. These are "connected" hires. Rarely is a position ever filled based upon merit or experience. In such a place as Massachusetts, for example, not even Affirmative Action quotas guarantee placement; however, if you are the second cousin of a state rep, you will be in clover as soon as you are of the requisite age to be employed full-time.

Sun, 03/10/2013 - 19:37 | 3318004 Chuck Walla
Chuck Walla's picture

As a Chicago resident, I feel sorry for the workers who were promised benefits and worked hard to fulfill their end of the bargain...

But they are useful idiots!  They work hard to elect and re-elect their Sugar Daddies!  Chicago Streets & San workers covered the 'burbs for Rahm's congressional run on the city's clock!  Soon enough they will know they are just idiots.

FORWARD SOVIET!

Sun, 03/10/2013 - 20:03 | 3318061 Ray1968
Ray1968's picture

It may shock a few, but many of the firefighters and cops don't support the "system"; they are just as skeptical as we are. However, we all need a job. I work in private industry, but many don't. There is not much private industry left!!!!!

Yes, many gov't employees soak the system for all its worth, but many put in a hard day's work.... more than you can imagine. 

Negative bang me away if you want. But not everyone is bad.

Sun, 03/10/2013 - 21:10 | 3318176 otto skorzeny
otto skorzeny's picture

once you draw a check from the "system" you are part of the "system"- I'm sure thay feel bad as they pick out a new Denali or put in an in-ground pool(which alot of them in my area have). and from what I know of govt employees-not "imagine"- they do fuck-all and most of them look at the taxpaying public as nothing more than marks to be soaked for every dollar. they will not escape untouched as most of them think it can last forever.

Sun, 03/10/2013 - 20:47 | 3318146 masterinchancery
masterinchancery's picture

Not me, I have watched these worthless and corrupt SOBs for decades as they raped the taxpayers.

Sun, 03/10/2013 - 19:35 | 3318000 otto skorzeny
otto skorzeny's picture

yeah-but we owe them-don't you remember 9-11 that canonized every cop and firefighter in America?

Sun, 03/10/2013 - 18:59 | 3317931 max2205
max2205's picture

And you thought what you pay in propery taxes was enough... Bwaaaaa

Sun, 03/10/2013 - 17:57 | 3317829 Schacht Mat
Schacht Mat's picture

So the millenials are going to pay more and more to get lesss and less to fund the crowd that created the debt hole in the first place - yeah - that's going to happen.

Time to take the "baby" out of "baby boomer"......

Sun, 03/10/2013 - 18:16 | 3317861 Nimby
Nimby's picture

Can you say: "Taxation without representation"?

 

Sun, 03/10/2013 - 18:00 | 3317832 HD
HD's picture

TPTB got this.  Contaminated, chemical laden sugary, fatty, salty food + Obamacare + ignorance = Reduced pension and retiree health care obligations.  

 

 

Sun, 03/10/2013 - 18:01 | 3317837 spinone
spinone's picture

So we're supposed to get taxed to pay for retired baby boomer gold plated healthcare and retirement benefits, and get taxed for baby boomer's un-meanstested social security benefits.  After the FED debased the currency to prop up baby boomer's stock portfolios.  This is the greatest wealth transfer from old to young in history.  Baby Boomers are the greediest fuckers ever.

Fuck this.

Sun, 03/10/2013 - 18:07 | 3317846 ziggy59
ziggy59's picture

...and they, federal workers, owe billions in back taxes
"If you owe back taxes, you might be mollified to know that 311,566 federal workers and retirees do too. Or maybe it will make you mad. The latest count showed they owed over $3.5 billion in taxes in 2011 (up from $3.4 billion in 2010."
http://www.forbes.com/sites/robertwood/2013/03/10/you-owe-taxes-so-do-ir...

Why the fuck do they paid each week without having wages tapped? Oh, thats right, thats only for peons

Trickle down wealth effect..
The bankster gang should be imprisioned

Mon, 03/11/2013 - 17:15 | 3320633 dizzyfingers
dizzyfingers's picture

Re: ""If you owe back taxes, you might be mollified to know that 311,566 federal workers and retirees do too. Or maybe it will make you mad. The latest count showed they owed over $3.5 billion in taxes in 2011 (up from $3.4 billion in 2010."

I pay every penny I owe, and I say fire those (insert your own epithet here), void their benefits, and give the jobs to taxpayers who want and need to work.

Sun, 03/10/2013 - 18:12 | 3317853 lolmao500
lolmao500's picture

With DC insane crime rates? No thank you. DC is a dump.

Sun, 03/10/2013 - 19:33 | 3317995 otto skorzeny
otto skorzeny's picture

the criminals are the only honest crooks in DC

Sun, 03/10/2013 - 20:48 | 3318147 masterinchancery
masterinchancery's picture

Try Wyoming.

Sun, 03/10/2013 - 22:15 | 3318313 MeBizarro
MeBizarro's picture

Most of Wyoming is a pretty arid environment with brutal winters and a pretty inhospitable climate.  Its an absolutely beautiful place but not a place I would want to live. 

Sun, 03/10/2013 - 18:17 | 3317857 j.tennquist
j.tennquist's picture

Let them eat horsemeat

(conveniently found almost everywhere)

Sun, 03/10/2013 - 20:12 | 3317884 Seasmoke
Seasmoke's picture

I call bullshit on 192 billion. It's easily 10 times that amount. Parasitic motherfuckers.

Sun, 03/10/2013 - 18:49 | 3317910 steveo77
steveo77's picture

why use 2009 data, the market is up 100% since then, seriously

Sun, 03/10/2013 - 18:59 | 3317930 de3de8
de3de8's picture

Yeah, it's gonna get ugly.

Sun, 03/10/2013 - 19:05 | 3317944 WallowaMountainMan
WallowaMountainMan's picture

so, like, if i live in not a city, do i have to worry about this too? or should i just worry about everything else?

Sun, 03/10/2013 - 19:31 | 3317991 Salah
Salah's picture

The 68 sq. miles of the District of Columbia (7 miles are water) has the highest per capita incomes in America, compared to the other 50 states.  In fact, its gross state product exceeds that of the next 17 states, and this does include those relevant counties in southern Maryland or northern Virginia in the DC Metro.  Not bad for a place who's only "industry" is government.

Sun, 03/10/2013 - 21:28 | 3318216 luna_man
luna_man's picture

 

 

Oh, pipe-down!...How can you come to MY MAIN MAN'S site day in and day out, not knowing this crap is not sustainable!!

 

five years at the most

Sun, 03/10/2013 - 22:10 | 3318305 MeBizarro
MeBizarro's picture

Its the healthcare costs that are going to sink the US at every level.   When you get past all of the idealogical crap and posturing with the Big 3, it was their retiree healthcare costs which were killing them.  Uwe Reinhardt always made the point that 'US paid more per car in retiree healthcare costs per auto than steel' and that was the case starting after 2000. 

Mon, 03/11/2013 - 02:02 | 3318578 Lord Of Finance
Lord Of Finance's picture

My father was in a union for 10 years back in the day. He is now retired and when he went to recieve his union pension lump sum, they told him they could no longer dole out the lump sum. He had no choice but to take a monthly check. These pensions are busted. Hopefully soon these unions will be busted as well.

Mon, 03/11/2013 - 17:17 | 3320639 dizzyfingers
dizzyfingers's picture

Lord of Finance: obviously the union bigshots have the money and the union is SOL. Their members ought to get out the guillotines and make a show of their union bosses.

Mon, 03/11/2013 - 06:53 | 3318737 koaj
koaj's picture

Contract? I didn't sign any contract. - L Spooner

Mon, 03/11/2013 - 17:28 | 3320688 dizzyfingers
dizzyfingers's picture

FromMARKETS7:56pm

SEC charges Illinois with securities fraud State misled municipal bond investors on health of pension system
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