Posted on 12/23/2010 2:45:34 AM PST by abb
PRICHARD, Ala. — This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.
Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.
Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.
Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.”
The situation in Prichard is extremely unusual — the city has sought bankruptcy protection twice — but it proves that the unthinkable can, in fact, sometimes happen. And it stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain: if nothing changes, the money eventually does run out, and when that happens, misery and turmoil follow.
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(Excerpt) Read more at nytimes.com ...
The town was bound by state law to pay the pensions so it’s irrelevant what the town decided.
“Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.”
And your comment about one legislature binding a future one refers to their ability to pass laws. The pension law was on the books and the town was obligated to keep that law unless it was repealed by a legislature. Hence failure to appropriate sufficient funds to pay the pensions was a violation of the law not the passage or binding of any legislature.
Whether the town had the funds is a another issue.
“I doubt it was necessary. And politicians break their promises all the time”.
Doubt what was necessary? Fire protection? Maintaining a sewage system? Police protection?
“In this case that you are referring to some of the promising politicians are probably dead”
Their promises were made law so do you suppose law only apply so long as those who passed them are alive?
No. No pardons, no excuses for tripe.
You know something, Sherlock, we had all those things when I was growing up on Long Island. That's in f@)#*$g New York State in case you don't know. We had NO SALES TAX. There was an income tax but I think it topped out at 3%. Three percent was also the approximate proportion of the population that worked for state and local government. (And BTW all those local governments that you wish to separate from State government are instrumentalities of the State.) I don't know for sure but I would guess that the pensions, if they existed at all for those NYS employees, were minimal.
Now they want to retire like kings. They, the ones not yet retired, are more than six percent of the population. The sales tax in NYS is over eight percent. I think their income tax rates top out at 15% to support the hoard.
How much is too much? I'm surprised that no one is shooting yet.
ML/NJ
Unfortunately, that does not apply to states.
Most companies didn’t let you start drawing your pension till you were 62-65. Many of these sob stories are about people less than 60.
At my last job, if I have retired at 55 with 30 years of service, I still would not have gotten a dime till I turned 62. Since these are government workers they drew them immediately.
I do hate to see anyone get burned, but it is going to get worse as government pensions cannot be paid much longer at the current projections.
By the way, I was laid off after 13 years and they cashed me out 5 years later for $4800 lump sum. Not a lot for 13 years service, but better than nothing.
But it does apply to state agencies that are often used to manage pension funds.
“The same local government that overpromised on these pensions also ignored the clear financials.”
Local pols don’t become State and Federal Pols by making hard choices. They get there by bending over, and passing the buck to the next generation.
You didn’t REALLY think these local Dems were going to endanger thier own future careers by voting AGAINST the Union’s interests, did you?
Later Roman emperors did that. They sold all the big temples and basilicas, and the plutocratic senators who bought them up subdivided them, turning the porches and naves into multistory rooming houses. The Theater of Marcellus became a privately-owned apartment house until the 20th century. This happened all over Rome.
Let the politicians make their promises from open spaces.
What public spaces? The cash-strapped (because the grandees knew how to stiff the tax collector) emperors rented out, and then sold off, patches of the Roman Forum and the imperial fora. The fora gradually filled with ramshackle multistory apartment blocks (insulae) until, in the time of Honorius, one couldn't see across the Forum, or even see much sky in the narrow lanes and alleys that became the rat-warren streets of the Dark Ages. (Hint for urban-planning fans: this is what the doctrine of "highest use" leads to.)
A few spaces remained open, like the sands of the Circus of Domitian where gladiatorial combats and chariot races will have been staged, as in the Colosseum, down to 409 A.D. when Honorius forbade gladiatorial displays. Domitian's circus in Late Latin would have been popularly called the Platea in Agona (two Greek loan-words -- that alone should tell you something), which eventually became "Piazza Navona".
And as all this happened, the irony was that the money was there. In the fourth and fifth centuries, the average income of a Roman senator was three times what it had been in late-Republican and Augustan times. It just wasn't taxed, because the tax-ees managed to push the cost of the public treasury onto people lower down the greasy pole. Making the pole, one could add, greasier and greasier. And the age, darker and darker.
And what did the grandees spend all their loot on? Huge houses, bigger than anything seen in the High Empire except the imperial houses on the Palatine and, infamously, Nero's Golden House. The private homes of the later Roman plutocrats and senators became palaces, with vaulted ceilings tastefully decorated and columns robbed out of the old public buildings, structures built around the Godfather roles their owners played with one another, with visitors, and with the little people who occasionally were ushered into The Presence. That ..... and armed bodyguards (satellites), and political grease and push and clout and nod.
“The teachers I know get to retire at 55.”
Age 52, In Indianapolis Public Schools, if they have enough “retirement points”.
“The pension law was on the books and the town was obligated to keep that law unless it was repealed by a legislature.”
You cannot wring blood from a turnip, no matter how hard you try.
The town should be FORCED to deorganize, and the pensioners taking their chances in bankruptcy court, JUST LIKE EVERY OTHER U.S. CITIZEN.
Start taking some political seats away from Democrat bases like this, and you will start seeing some REAL change in the parasite mentality.
Until the street-lights begin going out, most people just aren’t going to get it.
You're kidding right?
It is incredible that this has gone on for so long; absolutely disgraceful. Now that Newark, NJ has cut officers, there are horror stories in the news about people getting shot in Newark. The people were always being shot, but before they buried the stories to attract people to the new arena they built.
I believe going forward they all read “base”, but the obligations they’ve run up for those that got away with it are staggering. Many young people looking to feed off the taxpayers are going to be finding slimmer pickings...
I’ll have to look that up; as it is, I’ve been angry, mad as hell, sick & disgusted about it for years.
Thanks
I guess you don't remember during the Carter years when corporate gangsters bought companies that had overfunded benefit programs, that the thieves stole and bankrupted the companies. The people got nothing except pink slips.
Guess you should have been a firefighter, their benefits just keep on going....9/11 reference. </sarcasm>
They were selling that free health care when I joined in 54, they still schilling it?
People need to take care of themselves. Nothing is guaranteed. Gangsters come in all flavors, corporate and union and self employed.
“The situation in Prichard is extremely unusual — the city has sought bankruptcy protection twice...”
I think the story said the court wouldn’t allow it but that would be a last ditch act, sell off any assets, equipment, etc. and let everyone owed have a share before removing the city charter. If they absolutely can’t pay the bills bankruptcy seems the only course.
But then who keeps the water system going and the streets repaired? The former government agencies as private businesses? Profits cannot be legislated either so no matter what “You cannot wring blood from a turnip, no matter how hard you try”.
I can retire at 55 with 36.5 years of federal service to get about 70% of my base pay.
I'm pretty sure the town of Prichard doesn't administer a welfare department. Almost all but the largest cities stopped administering their own welfare by the 1950s.
It's almost completely done at the state and federal level now.
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