Why not? Sounds like a legitimate question to me. The findings said bonds and retirees are consuming 35 to 42 cents of each dollar the city takes in. If thats not a 500lb gorilla in the room, then I don't know what is.Quote:
Originally Posted by noise
This. And this is why we need bankruptcy.Quote:
Originally Posted by Kevgoblue
An EFM/EM can't walk away from most of these obligations and lacks the leverage to really push these costs down in a negotiation.
This residency issue bothers me.Quote:
Originally Posted by iheartthed
Tonk's point is that there is some 'customer choice', even in municipalities. That some people stay enslaved to their city isn't much different than enslavement to other monopolies -- Edison, Comcast, Michigan State Lottery, or Detroit Casinos*.
So back to my fascination. Does anyone else think that moving out of Detroit doesn't eliminate your responsibility to finance the mess? After all, departers voted for officials who agreed to pension benefits that exceed the US average. So shouldn't they fun what they agreed to back in the day?
* - The casinos aren't stickly a monopoly, but an oligopoly.
"In theory this is true also, but only if the CofD has the money. And I question if the pension funds are in good shape as you claim. I read were Andy Dillon was on the radio this morning and said the two pension funds were only 47% and 60% funded."
I don't trust much that comes out of Andy Dillon's mouth. The numbers from 2010 showed those funds at a much higher percentage and the markets been on a huge run up the past 2 years.
Those that left the City, left out of fear for their safety, and/or frustration with City services. They thought they could get a better deal somewhere else. @ the time they were voting, no where did it say "Do you vote for this contract because over the next 60 years, we're going to misappropriate funds, and run this City into the ground". Had THAT been the wording, I'm sure the voting outcome would have been different. [[then again, maybe not) To me, this is the equivalent of suing one of the decendants of the underwriters of the Constitution, because you were injured by a gun during the robbery. [[2nd amendment reference) They lifted the residency requirement, therefore giving them the right to move if they so chose. The no-longer-residents excercised their "customer" rights by moving out.Quote:
Originally Posted by Wesley Mouch
Edison is the only comparison that's even remotely analogous. Even still, it's not a completely comparable situation. You can choose to have electricity in your house or not. If you don't pay your electric bill then you don't have electricity. If you don't pay your taxes... You're still a citizen.Quote:
Originally Posted by Wesley Mouch
I do get your point, but since our laws allow your current voting decisions to elect those who have the right and perhaps obligation to negotiate future costs, then I think there's a moral obligation.Quote:
Originally Posted by Honky Tonk
Underlying my comment is the abhorent notion that public employees should not be able to bargain with elected officials who can gleefully give away future benefits. There's something wrong when you can grant future pensioners benefits for which you don't really have to fund today with your cash. Maybe an actuarial calculation that if you increase a future benefit, you must fund it NOW. Not with your children's money.
End of rant.
No rant taken, I actually agree with you. @ the time, though, [[I believe I'm WAY older then you are), NO ONE thought the cash cow would get sent to slaughter. You're looking @ the end results of such thought. It was the same train of thought with the auto companies. VP's, Engineers, designers, workers, Unions, ALL abused the system. I can't even begin to tell you how poorly American cars were made @ the time. And the makers had an "FU" attitude. When customers were offered a choice, [[manufacturers that made vehicles that would hit 100K miles with little grief), customers took it. Detroit, instead of pointing fingers and crying foul, has yet to come to grips with what residents, [[customers) really want, IMO. It still is trying grandeous displays instead of providing the basics.Quote:
Originally Posted by Wesley Mouch
Few thoughts on yours...Quote:
Originally Posted by Honky Tonk
I don't think most workers think of their organization [[GM, city, etc.) as a cash cow. They simply got a job. A good job. With good pay and benefit. No one -- even the best employees -- want to see their job end.
Coming to grips with what residents NEED...? No. That's why government needs to be very limited in scope. As soon as it grows too big, it starts to see itself as necessary. Big companies feed this festival as much as big labor does. They all want something. Thus, government shouldn't be giving things.
Basics...? Not very sexy. No one gets re-elected on basics. Promise everyone the moon. It took a recession to do us the favor of pointing out just how wasteful our government has been. There's a lot of good for everyone if we can get government out of the way, and build a vibrant economy before other countries catch up and kick our collective butts.
"There's a lot of good for everyone if we can get government out of the way, and build a vibrant economy before other countries catch up and kick our collective butts."
Is this like those pesky unions that now represent a fraction of the entire labor force but are also responsible for holding back the entire economy? Who knew that the private sector was so weak and so helpless?
A few musings, if you don't mind.
This financial review team -- it's made up of five people. Two "independents" and three State folks. The vote was 3 to 2 for intervention. Does anyone have any information regarding how each person voted? Doesn't the make up of this "team" seem to almost make sure the the State can take over? Just seems to me that the deck is already stacked against any city they want to take over.
We've got a perty big surplus nowadays; thanks to raping the hell out of my back pocket to the tune of about 900.00 of new taxes this year [[thanks, Tea Baggers!!). Now the State seems to think it's cool to not even give me a reach around in the name of jobs [[where are all those jobs, any ways?) and it's gonna broomstick Detroit when the State is sitting on so much cash?
Can anyone help out with this one: Seeing that we've got a ton of cash now in State coffers, what about this section of our State Constitution?:
STATE CONSTITUTION [[EXCERPT)
CONSTITUTION OF MICHIGAN OF 1963
§ 26 Limitation on taxes; revenue limit; refunding or transferring excess revenues; exceptions to revenue limitation; adjustment of state revenue and spending limits.
Sec. 26.
There is hereby established a limit on the total amount of taxes which may be imposed by the legislature in any fiscal year on the taxpayers of this state. This limit shall not be changed without approval of the majority of the qualified electors voting thereon, as provided for in Article 12 of the Constitution. Effective with fiscal year 1979-1980, and for each fiscal year thereafter, the legislature shall not impose taxes of any kind which, together with all other revenues of the state, federal aid excluded, exceed the revenue limit established in this section. The revenue limit shall be equal to the product of the ratio of Total State Revenues in fiscal year 1978-79 divided by the Personal Income of Michigan in calendar year 1977 multiplied by the Personal Income of Michigan in either the prior calendar year or the average of Personal Income of Michigan in the previous three calendar years, whichever is greater.
For any fiscal year in the event that Total State Revenues exceed the revenue limit established in this section by 1% or more, the excess revenues shall be refunded pro rata based on the liability reported on the Michigan income tax and single business tax [[or its successor tax or taxes) annual returns filed following the close of such fiscal year. If the excess is less than 1%, this excess may be transferred to the State Budget Stabilization Fund.
The revenue limitation established in this section shall not apply to taxes imposed for the payment of principal and interest on bonds, approved by the voters and authorized under Section 15 of this Article, and loans to school districts authorized under Section 16 of this Article.
If responsibility for funding a program or programs is transferred from one level of government to another, as a consequence of constitutional amendment, the state revenue and spending limits may be adjusted to accommodate such change, provided that the total revenue authorized for collection by both state and local governments does not exceed that amount which would have been authorized without such change.
History: Add. Initiated Law, approved Nov. 7, 1978, Eff. Dec. 23, 1978
Popular Name: Rainy Day Fund
Should I be waiting for a check?
Also, for those who can't figure this out, Capitalism is NOT a government system. We've seen Capitalists try and fail horribly in in this State trying to apply business methods to governing. They are not leaders; just because they may have had some success in the private sector does not automatically qualify a person to lead people and government. Sorry, but it's an apples and oranges thing. We can stop this fucking experiment now.
If the EM/EFM model is so super great, how long has DPS been under State control? And wait one second! Before you shout "Look at Pontiac!!!", Look. Anyone, my dog for that matter, could have walked into that place and hacked the living shit out of the place and had the same results. Fuck the Master Plan; we don't need green space. That's not impressive. Impressive would have been accomplishing that without so much disregarding for the people that the government serves.
While we all sit around bitching at the computer; these Capitalist Pig Dogs are dismantling our government systems under the guise of "it's for your own good" and "you've got to run government like a business". Makes about as much sense as running businesses like government. CPDs are driving down wages through bleeding the unions and educational "reforms". If the workforce is stupid, you don't have to pay them as much [[see the attempts at getting rid of the prevailing wage and the reasons why). They want Michigan to be a low-wage state. Too bad; unions is what really made a lot of the tourism go in this state. Ole Screw Turner doesn't have any extra cash, Ole Screw Turner doesn't go hunting, snowmobiling, hiking, fishing, sporting events, camping, hosteling, motorcycling, drink all of those yummy like beers and all that shit, ya know?
Bullshit. Each and every one of you. Bullshit. This is not all about Detroit. It's about bludgeoning the Democrat breadbasket so bad that it will take a lot of time to recover. This is the final horrah for Tea Bagger Central; it's a make or break kinda time. If they don't make this happen right now, Bagger Nation is finished forever.
The government serves us, the people, not businesses. Businesses are an important component of our society but we sure as shit should not sell our asses out primarily for businesses. It's not about them; it's about us. Fuck you, "job creators". Your just a bunch of free loaders who don't wanna pay for all that stuff that help you be successful, like roads, lights and other infrastructure. They created a new class of freeloader by interjecting scabs right into the hearts of unions through right to freeload laws.
Get Capitalism out of Government at every opportunity, and let's return government back to the people, for the people and of the people. And make sure that you kick every Tea Bagger in the balls when you seem them. They are a huge part of this problem and their unAmerican worldview should be marginalized at every opportunity.
I agree with some of this [[not all, by any means), but most of it is not relevant to the financial position of the city. You can say that anyone could have done to or for Pontiac what the EFM did, but they didn't. The current people running Detroit have amply demonstrated that they aren't going to do what is necessary. An E[[F)M should have been appointed years ago. Not because he would sprinkle magic unicorn dust over the city and make everything better, but because the actual government has been sprinkling something much less attractive.Quote:
Originally Posted by Baselinepunk
If you don't like an E[[F)M, I'm fine with bankruptcy too.
Its not an experiment. Its a democracy. People vote for their leaders. I don't like President Obama. But I respect him as president.Quote:
Originally Posted by Baselinepunk
We'll get a lot farther if we stop thinking the people who think differently than us aren't out to get us. Nor is it a f---ing experiment. There's no grand conspiracy. Just people of differing opinions who believe different things. Both sides feel the other is abusive. There's no secret socialist agenda. Nor is there a secret capitalist agenda.
We just disagree.
I don't see that business people have tried and failed any more than professional politicans have tried and failed. There are good people, and bad people.
Can't we all just get along and not think the worst of each other.
Pontiac is approaching its 5th year of an EFM and they still haven't resolved the structural deficits in the city after laying off or outsourcing 90% of the workforce and selling off a number of the city assets. Meanwhile, property values have fallen something like 50% and you don't see anyone rushing to move into Pontiac. That's the poster child for success?
A couple other developments today...
http://www.detroitnews.com/article/2...text|FRONTPAGE
http://www.detroitnews.com/article/2...over-furloughs
http://www.freep.com/article/2013022...ewis-dave-bing
And Nolan Flinley actually had an excellent article proving my point form earlier.
http://www.detroitnews.com/article/2...text|FRONTPAGE
"Haircuts on pensions and health care" = cuts. What do you consider to be the alternative to cuts?Quote:
Originally Posted by corktownyuppie
I'm going to go out on a limb here and bet that you have no Aunts on a city union worker's pension. The average DPD police pension is $28,000/year. [[link) It's incredible to see people beating up on pensions--which are deferred wages, that people were promised contractually, as part of their pay packages, remember--as being fair game for draconian cuts, but God forbid! the Wall Street creditors don't get their money, and in a hurry too. Remember that when we talk about "hard decisions" on cutting someone's pension we are talking about elderly people on limited incomes living, spending, and supporting family members here in this city.Quote:
Originally Posted by corktownyuppie
Melocoton,
I don't want to put word's in corktownyuppie's mouth, but I think his position is similar to mine.
Both retirees *and* "wall street creditors" need to take huge haircuts, or get pennies on the dollar after a bankruptcy.
There are no sides. The situation is so bad that everyone needs to hurt. If you're a pensioner, you will still have social security if your pension gets cut from, say, $28,000 to $12,000 per year. Coupled with about $15,000 per year in social security payments, that pensioner would be making over $27k per year, more than enough to live comfortably off of, but not enough to live lavishly off of [[like having a boat, or a second house, or other luxuries like that).
And if you are a "wall street investor", you can probably take the hit to your portfolio that a default on Detroit's bonds would cause, because you probably diversified your investments. And even if you didn't, you received a higher interest rate on the bonds because Detroit's risk would have been priced in, so you, like the pensioner, have been getting too much from the City for too long.
I will also add that someone that thinks that Detroit can afford to just screw bondholders or just screw retirees has no idea how bad things are.
"Both retirees *and* "wall street creditors" need to take huge haircuts, or get pennies on the dollar after a bankruptcy."
To what end? The city isn't paying into the pension system for people who are currently getting a pension. Those contributions are funding the retirements of those currently working for the city. I know that the Police already took a cut in future pension payments. If the city stopped making pension payments, as you advocate, that only screws the people currently working for the city or any retiree who lives long enough to watch the current pension program go belly-up. If I was a current retiree, I would want to know why what I paid into the system is being slashed so that a future retiree can enjoy a much better retirement.
Quote:
If you're a pensioner, you will still have social security if your pension gets cut from, say, $28,000 to $12,000 per year.
That is not necessarily true. Municipal employees in general weren't always part of Social Security until the mid-80's. I don't know how many Detroit retirees that might affect.
Given that the plan is significantly underfunded, this is probably not really true.Quote:
Originally Posted by Novine
This is an important point. The pain needs to be spread to all.Quote:
Originally Posted by Eber Brock Ward
Frankly, everyone has a part in this game. We all like to blame our 'usual suspects', but the best plan is for every single person to hurt a bit. I do think the pain though should be more for those who are benefitting the most of the current situation. If you're a city contractor who has been getting 150% of market, you can take a bigger haircut than the retiree who is getting 90% of the average retirement income for their cohort.
Good point re muni employees. It will probably be on a plan-by-plan basis.
"Given that the plan is significantly underfunded, this is probably not really true."
Everyone wants to make the claim but no one has backed it up with actual numbers. 100% funding would be awesome. But most pension funds are still recovering from the crash in 2008. The latest numbers I saw for the General Pension fund is 80%, which isn't awful.
Isn't this the same arguement that a kid coming out of college is likely to make? "Why am I paying into Social Security so a current retiree can enjoy a much better retirement than I will be able to."Quote:
Originally Posted by Novine
Maybe a young employee in the automotive industry, post bankruptcy. "Why am I doing twice the work, so the company can continue to afford to fund the pensions of current retirees, when I will not get one".
I think the point is, as said by Wesley and EBW, the pain needs to be shared by all involved.
This is what I do if I was appointed Emergency FinancialManager:
Most of the taxes and statutory revenue sharing goes tothese Detroit city services:
1. Hire 1,000 to 2,000 police officers. Provide new squadcars and patrol certian neighborhoods that had more violent crimes. Hirecommunity police officers. Citizens can patrol their own neighborhoods day andnight. Tougher curfew laws of those 18 years and under will be enforced duringschool calender days unless they are accomplied by an adult. Mini beats will beinstalled. Main central Police Stations will be open 42 hrs. a day, 7 days aweek.
2. Restore EMS vehicles and provide up to 500 new EMS vehicleswithin 2 years. Increase responsive time for medical emergencies.
3. Provide new equipment and surplies for Detroit Fire Dept.Have every last fire hydrants inspected 2 times per season.
4. Go out into corporate and industrial centers of the worldand lure them into Detroit area including downtown. Provide new regional jobsincluding enviromental jobs.
5. Restore public lighting in every last Detroitneighborhood. Install solar transformers and L.E.D. fixtures into these newstreet lights. Put heavy fines to those either vandalizing or cause vehicleaccidents to those street posts. Install hidden traffic cameras into every lastmain roads in Detroit neighborhoods to prevent not only accidents but alsoviolent crime.
6. Work around financial loopholes to have The State ofMichigan partially lease Belle Isle with a $5.00 annual fee to Michiganresidents $3.00 fee to foreign visitors. Make the park free to all Detroitresidents only. Restore various Bell Isle Projects from the Belle Isle Casinoto re-opening of the Belle Isle Zoo.
7. Restore Subsidized housing projects through DetroitHousing Comission into various Detroit neighborhoods. Make sure those residentshave required paperwork to they could be a quick waiting list. Resident mustnot have years of housing disputes. Resident must be a sex offender, childmolester or be on parole until after 2 to 10 years of criminal record has beenforgiven. Housing will not be set up in a 'post Jeffries Projects-HermanGardens' setting, but in a mini luxury apt-condo setting. Provide 2 mandatoryseasonal inspection of their units. A three strikes rental law will be effectto a DHS resident. Their units should not have any illegal border-squatterdisputes, illegal drugs, gang activities, noise, any crimes. Damage to a DHSunit will result in absolute 90 day eviction notice; that includes a $500.00fine, loss of refund deposit and not be able to re-apply for any DHS unit.
8. All Detroit city government workers and city workers willrecieve up to 10 to 25% pay cut. There will be no raises or bonuses. Furloughdays will commence every friday. Pensions and benifts from its unions will notbe cut, even when their contract is over. Expect lower paychecks and increaseproperty taxes.