How other cities are dealing with pension deficits

[BankruptcyGuy]

A couple of interesting articles on pension shortfalls, and how they are being dealt with. First, Chicago:

http://www.chicagobusiness.com/artic...995H2332578C6F

A couple of notes: this doesn't fix the city teachers [[unlike Michigan, they have a separate pension fund) or city fire or city police [[two separate funds in Chicago). And a $750 million tax increase is a big, big number, even for Chicago.

And also Rhode Island:

http://wpri.com/2014/04/07/police-of...on-settlement/

Here, the state changed the pension accrual calculation from 8.25% [[?!?!) to 7.5%, and reacted to the newly-calculated pension shortfall of $9B by reducing COLA, changing benefit levels and adjusting contributions.

Recall that when Central Falls filed for bankruptcy, the State of Rhode Island passed a law giving general obligation bondholders preference. Retiree pensions were cut up to 55%.

[Packman41]

http://www.chicagobusiness.com/artic...995H2332578C6F

A couple of notes: this doesn't fix the city teachers [[unlike Michigan, they have a separate pension fund) or city fire or city police [[two separate funds in Chicago). And a $750 million tax increase is a big, big number, even for Chicago.

OK, so they are going to have "massive" tax increases that will raise $750 million over the next 5 years - yet that won't fix the problem. Currently, the CofC has an underfunded obligation of nearly $20 Billion and the ANNUAL contribution for next year is supposed to be $1.07 Billion.

This "fix" still misses the mark by a wide margin.

And with the tax increase how many residents will move out of town or out of state and avoid the tax increase all together??