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Most others wont follow this. You are aware of the local pension issues in Calif with some cities being unable to make their pension contribution share to the state and saying they can't afford to pay the penalty if they pull out. The move by Maryland to require the local governments ( counties and B town) to contribute to the pension is a possible problem. To have them start borrowing to make the contribution is to create issues down the road. The wealth in parts of the state can only be taxed so much. Ghostly this is in large part why I think trying to incorporate Detroit with the county would be a disaster.
I fully support having each local government chip in their share of their employee's state pensions. It was grossly unfair to have wealthy counties such as Montgomery & Howard offer their school employees mega bucks while the state taxpayers were stuck paying pension contributions on salaries that no other counties could possibly match. The state had no say in county salary negotiations and yet the state was stuck paying the pensions for those same salaries. Grossly unfair.
In terms of Detroit, there are no good options. How many Detroit retirees actually live in Detroit? It is hard for me to believe that there are more than a few retirees who are concerned that 40% of the city's street lights are out, increasing criminal activity, further depressing the housing market, increasing unemployment, etc. It's a vicious cycle. It feels as if Detroit is a third world country and I cannot understand how retirees cannot comprehend that the souls remaining in Detroit have no change to spare. The mere thought of living in or near city neighborhoods without street lighting freaks me out.
Please.. do not chastise members who are here only trying to help or get info. We all have different experiences and views, you are entitled to yours and anyone can be mistaken.
If the Michigan constitution guarantees the pensions would the State of Michigan be on the hook to fund any difference in monthly payments to any Detroit pensioner that gets a reduced pension? I realize that in federal bankruptcy court Detroit may (that have not yet been fully adjudicated) be able to get relief from their burden but what about the State. Would the pension have to be made whole under the State Constitution. I would equate it to being the co-signor on a loan. If I co-sign a loan and the original borrower goes bankrupt but I do not I have to pay the debt.
I fully support having each local government chip in their share of their employee's state pensions. It was grossly unfair to have wealthy counties such as Montgomery & Howard offer their school employees mega bucks while the state taxpayers were stuck paying pension contributions on salaries that no other counties could possibly match. The state had no say in county salary negotiations and yet the state was stuck paying the pensions for those same salaries. Grossly unfair.
In terms of Detroit, there are no good options. How many Detroit retirees actually live in Detroit? It is hard for me to believe that there are more than a few retirees who are concerned that 40% of the city's street lights are out, increasing criminal activity, further depressing the housing market, increasing unemployment, etc. It's a vicious cycle. It feels as if Detroit is a third world country and I cannot understand how retirees cannot comprehend that the souls remaining in Detroit have no change to spare. The mere thought of living in or near city neighborhoods without street lighting freaks me out.
Lenoir you and I both know the many wealthier counties were also taxed to help pay the bills in the poorest jurisdictions especially Baltimore. If Baltimore had to stand on its own two feet it would long since have had its knees on the ground and the only question is if it would now be on its back or front. Maryland is able to compete with NOVA ( Northern Virginia) because of its wealthier counties and NOVA is able to compete with Suburban Maryland because of its wealthier counties. It is the added value of life in these wealthy counties that has bought such great private sector wealth to the region to compete against the federal government for talented individuals which increases taxes that can be redistributed to those who don't contribute as much. With out such highly efficient local government structures that wealthy would not pay the property taxes, sales tax ( to be redistributed) etc to live there that they do. It is not just the amount per capita spent by government on its citizens it is also the amount per capita raised by government. Sorta gotta believe anywhere the wealthier jurisdictions pay in more than the get pack as private citizens or in compensation for their work force. As evidenced and referred to by you in Michigan, Detroit needs Wayne County more than Wayne County needs Detroit so they hopefully will be grateful for what ever comes their way.
If the Michigan constitution guarantees the pensions would the State of Michigan be on the hook to fund any difference in monthly payments to any Detroit pensioner that gets a reduced pension? I realize that in federal bankruptcy court Detroit may (that have not yet been fully adjudicated) be able to get relief from their burden but what about the State. Would the pension have to be made whole under the State Constitution. I would equate it to being the co-signor on a loan. If I co-sign a loan and the original borrower goes bankrupt but I do not I have to pay the debt.
That is part of the court proceeding in bankruptcy to be determined. To do so would create a drastic moral hazard with locals defaulting on their pensions so someone else would pay for it until they all went bankrupt and no one was getting paid. That is the ultimate collapse of government. As the dinosaurs learned there is no guarantee that continued walking the face of the earth will exist. There is no such thing as a free lunch and we are witnessing the collapse of government at first in a few select local levels and will there be a state to follow? Illinois has just taken a significant step in trying to get its pension cost under control ( more will be needed) however they have still failed to address the problems of Chicago and not doing so could bring it all down if the state is responsible for local pension default.
Tuborg- lets say Detroit is successful and they are allowed to reduce its obligation why wouldn't Michigan be responsible to make pensioners whole? Michigan can not declare bankruptcy- there is no provision for States to do so.
Tuborg- lets say Detroit is successful and they are allowed to reduce its obligation why wouldn't Michigan be responsible to make pensioners whole? Michigan can not declare bankruptcy- there is no provision for States to do so.
Because there are limits to how much you can raise taxes on citizens and business to pay your bills. Why are there limits in the Midwest? Because Scott Walker, Indiana and other conservatively run states who are cutting taxes are waiting for them with open arms to relocate there. Heck Rick Perry travels nationwide to states raising taxes to recruit business there. Even is the senior forum there are frequent threads on low or no tax areas to transplant to. Hmmm seniors who require minimal in roads and education services etc who are financially comfortable tax payers leaving?
The state of Wisconsin’s advertising that targets Illinois businesses looks downright tame next to the in-your-face new campaign from the state of Texas.
Republican governors will gladly take the wealthy and business who want to flee increased taxes
Without analyzing the Michigan budget I will guarantee that their are funds available to pay pensioners that are now going to other areas- all not required by the State constitution.
You would not necessarily have to raise taxes. The issue would come down to does the constitution require the pensioners to be paid what was promised and does the State guarantee that.
Read the Makinac article he states Michigan taxpayers are on the hook but the article was prior to the bankruptcy. My question boils down to if the bankruptcy lets Detroit off the hook (which it may) does it put State taxpayers on the hook?
Without analyzing the Michigan budget I will guarantee that their are funds available to pay pensioners that are now going to other areas- all not required by the State constitution.
You would not necessarily have to raise taxes. The issue would come down to does the constitution require the pensioners to be paid what was promised and does the State guarantee that.
Read the Makinac article he states Michigan taxpayers are on the hook but the article was prior to the bankruptcy. My question boils down to if the bankruptcy lets Detroit off the hook (which it may) does it put State taxpayers on the hook?
Moody’s noted the pension benefits ruling — that the Michigan constitutional protection on pensions is trumped by federal bankruptcy law — is in line with the Central Falls, R.I., bankruptcy in which employees took significant pension reductions.
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