The NEXT 10 City Pensions That Will Run Out Of Money (Old article relevant to Detroit's Bankruptcy)

Business Insider ^ | 12/27/2010 | Gus Lubin

[SeekAndFind]

The first total municipal pension default happened last week: Prichard, Ala. ran out of money stopped mailing pension checks.

Hundreds of cities could be right behind. Projections by Robert Novy-Marx and Joshua Rauh [PDF] show the average city has $15,000 per household in unfunded pension liabilities. These massive liabilities are ignored by common government accounting (see chart).

Insolvency means benefit cuts or borrowing from the already-near-broke states.

Many of the 77 cities surveyed by Novy-Marx and Rauh are facing insolvency within the next decade. Other small cities like Prichard could go even sooner.

#10 Fort Worth

Mayor Mike Moncrief

Unfunded liability: $2 billion

Unfunded liability per household: $7,212

Solvency horizon: 2023

#9 Detroit

Mayor David Bing

Unfunded liability: $6.4 billion

Unfunded liability per household: $18,643

Solvency horizon: 2023

#8 Baltimore

Mayor Stephanie Rawlings-Blake

Unfunded liability: $3.7 billion

Unfunded liability per household: $15,420

Solvency horizon: 2022

#7 New York City

Mayor Michael Bloomberg

Unfunded liability: $122.2 billion

Unfunded liability per household: $38,886

Solvency horizon: 2021

#6 Jacksonville #6 Jacksonville

Mayor John Peyton

Unfunded liability: $4 billion

Unfunded liability per household: $12,994

Solvency horizon: 2020

#5 St. Paul

Mayor Chris Coleman

Unfunded liability: $1.4 billion

Unfunded liability per household: $13,686

Solvency horizon: 2020

Note: These numbers refer to St. Paul's largest pension, a teachers fund.

#4 Cincinnati #4 Cincinnati

Mayor Mark Mallory

Unfunded liability: $2 billion

Unfunded liability per household: $15,681

Solvency horizon: 2020

#3 Boston #3 Boston

Mayor Thomas Menino

Unfunded liability: $7.5 billion

Unfunded liability per household: $30,901

Solvency horizon: 2019

#2 Chicago

Mayor Richard Daley

Unfunded liability: $44.8 billion

Unfunded liability per household: $41,966

Solvency horizon: 2019

#1 Philadelphia

Unfunded liability: $9 billion

Unfunded liability per household: $16,690

Solvency horizon: 2015

[SeekAndFind]

NOTE:

1) This article was TOO OPTIMISTIC about Detroit, they estimated the city could last till 2023. The moment of reckoning came 3 years later.

Which makes me wonder how long the other cities will last before bankruptcy comes knocking...

2) The article was written before Rahm Emmanuel took over as Mayor of Chicago. Since then, the murder rate of Chicago's south side has SHOT UP.

[SeekAndFind]

Any other cities you have in mind?

Also... how many of the above are sanctuary cities for illegal aliens???

[Buckeye McFrog]

Pittsburgh has gotta be on that list. Has had only Democrat Mayors since the 1930’s, and they all make unsustainable promises to police and fire unions to get themselves elected every four years.

[cripplecreek]

I’ve been trying to warn people but they’re too busy beating up on Detroit to hear it.

The nation as a whole is in even worse shape.

[CincyRichieRich]

What do they have in common? City councils are run majority by libs...how about that? Mallory here in Cincy is as corrupt as they come...no money, but plenty for the streetcar.

[circlecity]

"This article was TOO OPTIMISTIC about Detroit"

I'm betting he was too optimistic with most of these cities and many of them will be doing a Detroit within the next 5 years.

[SeekAndFind]

RE: The nation as a whole is in even worse shape.

Yes, but America can print its way for some time. Hopefully, I’ll be long gone when (God forbid) this country goes the way of Detroit.

[morphing libertarian]

Cal and most of the two largest cities are sanctuary, actually the state policy is sanctuary.

The LT Gov was the mayor of SF when they released an illegal alien from jail and he killed 3 members of one family for cutting him off in a traffic merge. He’ll be our next governor.

[Steve_Seattle]

"This article was TOO OPTIMISTIC about Detroit, they estimated the city could last till 2023. The moment of reckoning came 3 years later."

A good point. Philadelphia seems next in line, chronologically, but the number that jumped out at me was new York's liability - over $100 billion.

I was glad to see Seattle not on the list, as I am now a city retiree. Seattle is far left on social issues, but relatively conservative on fiscal issues. Actually, the city did not become a far left enclave until the 1980s. Prior to that it was a middle-of-the-road, heavily Scandinavian town that actually had a few moderates and/or conservatives on the City Council.

[Paul R.]

Those figures for Chicago are astounding. If (if) Chicago has 6 years, that works out to about $6000 per year from the average household. The state itself is in horrific financial straits, and Gov. Quinn and the legislature are at each others throats (sort of a “M.A.D.” scenario), so, no help there.

One can only hope the crashes happen sooner than later, to discredit the libs in time for the 2014 elections.

[Buckeye McFrog]

We have city council people here who ran and apparently got elected on things like Gender Equity and Gay Marriage “Rights” Things that are not within the purview of municipal government whatsoever. The job should be about seeing to it that cops are on the beat, the garbage gets picked-up and the streets get plowed.

[Sender]

I think that the others will watch closely what happens in Detroit. They probably are already retaining lawyers.

[blueunicorn6]

If you make your money looting the public treasury, then nothing is more frightening than seeing the public treasury dry up. You’ll do anything to keep the money coming. Maybe you can get some money from another public treasury.

[Truth is a Weapon]

The estimate was not for the solvency of the City of Detroit but the time until the pension fund cannot meet its monthly distribution obligation. The pension plan has some assets which can be liquidated to pay benefits currently. However, if you discount all the future promises to today’s date at their present value the fund is way underfunded.

The City of Detroit filed bankruptcy, not the pension plan. For the time being retirement benefit payments can continue. Once it is determined the City will not fund the plan at its promised level, the pension plan itself will have to go into bankruptcy or otherwise revise their benefit obligations.

[Steve_Seattle]

Thank you for the clarifications. Do you know what other major cities - if any - might face a non-pension related bankruptcy?

[vette6387]

“The nation as a whole is in even worse shape.”

Its a whole lot worse than EVEN THATt! the World IS Broke! Collectively, governments at all levels around the world have/are spending at unsustainable levels. The world’s population thinks that they will be provided with all their needs by some magical source of money. That’s not true.
Here we are broke as a nation, and yet we are giving money we’ve had to borrow to Black Africa and other places to try and “buy” friends.

[SC_Pete]

Chicago just needs more gun laws. /sarcasm alert

[Lonesome in Massachussets]

It isn't clear that they were too optimistic. They were merely showing how long until the pension fund hit zero, not the overall solvency of the city.

[b4its2late]

Mayor Mike Moncrief - Democrat

Mayor David Bing - Democrat

Mayor Stephanie Rawlings-Blake - Democrat

Mayor Michael Bloomberg - Independent (My a$$)

Mayor John Peyton - Republican

Mayor Chris Coleman - Democrat

Mayor Mark Mallory - Democrat

Mayor Thomas Menino - Democrat

Mayor Richard Daley - Democrat

Michael Anthony Nutter - Democrat

[SeekAndFind]

Mayor Richard Daley Rahm Emmanuel - Still Democrat