Posted on 04/30/2020 3:31:23 AM PDT by SkyPilot
When Kentucky senior Senator and Majority Leader Mitch McConnell said this week that he would be in favor of allowing states to use the bankruptcy route to deal with their underfunded public pensions amid the pandemic emergency, state workers and retirees—already struggling with the economic and health crisis—were rightfully alarmed. “Using the bankruptcy route” is code for slashing pension benefits promised to state workers. Under current law, only cities and other local governments can file for bankruptcy and only with permission of the state.
McConnell supposedly represents Kentuckians and Kentucky already had the worst-funded state pension system in the nation—only 16% funded—before the COVID-19 market meltdown. Chris Tobe, a former trustee of the Kentucky pension and SEC whistleblower, suspects when the pension reports fiscal-year-end performance July 1st, its funding level may fall into single-digits. (Full disclosure: I served as Independent Counsel to Mr. Tobe in connection with his SEC whistleblower complaint.)
Presumably Kentucky would be the first state to use McConnell’s bankruptcy plan to eliminate state worker retirement security. Kentucky has over half a million (514,000) current and future pensioners who are unlikely to support his reelection. A staggering percentage (94%) of the state’s 114,000 retirees still reside in Kentucky and pump over $1.9 billion a year into all 120 counties. Cutting pension benefits will undoubtedly depress the local economy.
To be clear, McConnell is not opposed to all federal bailouts of pensions. A few months ago, he joined a bipartisan group of senators in introducing a bill to secure the pensions for nearly 90,000 retired coal miners as a recent wave of coal company bankruptcies threatened the solvency of the federal pension fund.
(Excerpt) Read more at forbes.com ...
Back in 1970 in high school, some of my friends asked, “whaat if I buy these savings bonds but when they mature the government won’t honor them.” I told them that if we lived in such a world, that would be the least of your problems.
I still feel that way about the fedgov. But this state stuff is different. States can’t print money and there are all sorts of things they can do to harm citizens, depending on how much they control their citizens’ lives.
If your life savings is in Social Security and Precious Metals hidden in your mattress, there is not much they can do to you other than create massive price inflation, don’t raise SS in response, and confiscate your pm’s at a set price. They did the latter almost a century ago, so they’ll have a hard time doing it again, but I fully expect the price inflation. They can’t just hand out money like it’s free breath mints and not expect prices to rise in response.
But when the state controls your savings, watch out. You may be set for a very bumpy future.
Chicago teachers union is a frank communist organization in an unholy money laundering alliance with democrat politicians.
That is truly bizarre.
If someone promises you something 40 years in the future and it doesn’t happen, they did not necessarily lie to you. No one has a crystal ball to see that far ahead.
Trying to fix this mess in KY is what got Bevin kicked out of the governorship. The teachers crucified him. Interestingly, he WAS turning things around and only lost by 5,000 votes out of 1.5 million cast.
I expect this to be pretty bad. My wife and I are preparing for the property tax increase that will probably follow. The reason we can live here is that the taxes are only $250 a year for a house and 32 acres.
Correct, and as I posted, many of these retirees can't wait to qualify for their state pension before they put their own home up for sale, call the moving company, and get out before they themselves have to keep paying outrageous state taxes.
People are saying that states are looking to raise property and sales taxes in or to "shore up" their bloated budgets and pensions. But as I said, even Democrats know that if they do that, they will drive even more businesses and citizens out of their state.
The Stock Market? Most stocks in the stock market meet the SEC’s definition of a Ponzi scheme.
> “Most states have grossly mismanaged their bloated pension systems ...”
And now they want a magic COVID bailout.
The public sector unions have brought this on themselves and they won’t accept responsibility because they are irresponsible to begin with and can be nothing but irresponsible.
I remember an acquaintance’s divorced spouse getting a job as a special education teacher and after 5 years of that applied to be a principal at a public school making close to six figures. Then retired after another 5 years at 90% of salary. WTH? And this was all ‘normal’ business.
I’m not insensitive but all the public sector retirees can downsize and make do on Social Security.
$250/yr on 32 acres?
Hmmmmmmmm
Yep. I would post on facebook that I don’t see any accomplishments to warrant his popularity and “it must be his dreamy eyes.”.
I agree 100%.
> Kentucky already had the worst-funded state pension system in the nation
Former governor Matt Bevin was excoriated for trying to fix that and lost re-election in part because of it.
That’s why we can, technically, live here on SS alone quite comfortably. :)
These State “pensions” rely on a Constitutional absurdity since they eliminate self-rule by the people through the mechanism of an elected legislature which holds delegated powers over taxation and credit.
One unquestioned maxim of a constitutional republic is that one legislature’s actions do not survive its term - that is, no legislature can prevent or forbid any action by its successor. If this were not so, the ability of the people to remove an obnoxious government and replace it with another at an election would be void.
All state labor “contracts” presume that the people CANNOT elect a Legislature which will alter or eliminate payments promised by a prior legislature, that a freely elected set of representatives lacks the power to do so.
But this is absurd, since the conclusion would be that such a successor legislature would be bound to raise taxes against its will and against the will of the people who sent them in order to fulfill a reckless promise by the legislature they are replacing.
Such a labor “contract” would amend the State’s Constitution giving sole legislative power to a Legislature, UNLESS the same State Constitution had already been amended to forbid the Legislature from acting to impair contracts arrived at in the past that promised a certain amount of payments to be raised through taxation.
Break out the yellow vests?
No wait, it’s purple shirts here
These are excellent points Jim, and very rarely raised in the debate.
States cannot declare bankruptcy and many pensions are state Constitution guaranteed.
I know some city workers, newly hired and old timers, new hirees come in on new tiers These new tiers enacted do not allow for the padding in the last few years of retirement as in the past. It is based now on your yearly salary at retirement, overtime not included. So the correction is in as far as I can see. Not sure if this relates to police and fire though. could be individual contract negotiation agreements
Makes me think of the time I got to see the horse farms there and some champions. My father went home and proceeded to plant bluegrass/fescue, which didn’t care for our yard. He coached every blade.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.