Unions have also bankrupted West Virginia

George Will
Saturday September 13, 2008

Unions can bankrupt their cities

VALLEJO, Calif. - Mayor Osby Davis, who has lived in this waterfront city across San Pablo Bay from San Francisco for 60 of his 62 years, says: "If you have a can that's leaking two ounces a minute and you put an ounce a minute in it, it's going to get empty."

He is describing his city's coffers.

Joseph Tanner, who became city manager after this municipality of 120,000 souls was mismanaged to the brink of bankruptcy, stands at a white board to explain the simple arithmetic that has pushed Vallejo over the brink.

Its crisis - a cash flow insufficient to cover contractual obligations - came about because (to use figures from the 2007 fiscal year) each of the 100 firemen paid $230 a month in union dues and each of the 140 police officers paid $254 a month, giving their respective unions enormous sums to purchase a compliant City Council.

So a police captain receives $306,000 a year in pay and benefits, a police lieutenant receives $247,644, and the average for firefighters - 21 of them earn more than $200,000, including overtime - is $171,000.

Furthermore, police and firefighters can store up unused vacation and leave time over their careers and walk away, as one of the more than 20 who recently retired did, with a $370,000 check. Last year, 292 city employees made more than $100,000.

And after just five years, all police and firefighters are guaranteed lifetime health benefits.

Even the City Council has at last faced facts and voted 7-0 for bankruptcy.

"The day after they voted," Davis says, "I didn't go out of the house - I was that embarrassed."

In other states, municipalities can pay for improvident labor contracts by increasing property taxes. But Vallejo's promises were made in the context of Proposition 13, which 30 years ago wisely restricted California politicians' reach for property taxes.

In 1996, the Navy base in Vallejo closed, which probably pleased some local liberals who share the anti-military mentality of San Francisco, to which some Vallejo residents commute by ferry.

Liberals who, Tanner says dryly, "want Vallejo to look a certain way," were pleased when Wal-Mart moved to an adjacent town, which now reaps the sales tax revenues.

Vallejo is an ominous portent for other cities, and some states, few of which are accumulating financial resources sufficient to fulfill pension promises they have made to their employees.

Are you weary of worrying about the crisis du jour - subprime mortgages and all that?


Get a head start on worrying about the next debacle by reading Roger Lowenstein's new book, "While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis."

"Next"?

It has arrived in Jefferson County, Ala., which includes Birmingham. Like Orange County, Calif., a few years ago, Jefferson County made risky investments in a desperate attempt to achieve a growth of assets commensurate with the cost of an infrastructure project.

When San Diego was in the process of earning the sobriquet "Enron by the sea," firemen could retire at 50 with 90 percent of their pensions - almost full pay for not working during half of their expected adult lives.

Credit Suisse estimates that state and local governments have a cumulative $1.5 trillion shortfall in commitments for retiree health care.

But it is the pension crisis that most dramatically illustrates Lowenstein's thesis about the slow accretion of power by the unions. Pensions "are a perfect vehicle for procrastination; in the financial world, they are the most long-enduring promises that exist."

Human nature - the propensity to delay the unpleasant - rears its ugly head: When pension benefits come due, the people who promised them, thereby buying labor peace and winning elections, are long gone.

Vallejo's unions contend that the city is solvent enough to meet its obligations.

But last Friday a court disagreed, holding that the city is eligible for bankruptcy protection. A lawyer for Vallejo says the unions will have to negotiate a "plan of adjustment."

Other cities are watching, perhaps including the one across the bay.

San Francisco recently reported that 184 of its employees made at least $30,000 apiece in overtime in the first half of this year. A nurse at the county jail made $128,000 in overtime, putting him on track to top his total 2007 compensation of about $350,000.

Nice work it you can get it, and you can get it many places.

Will may be reached by e-mail at georgew...@washpost.com.

http://www.dailymail.com/Opinion/gwill/200809120389?page=2&build=cache

YUP, and it has already arrived in all 55 counties in West Virginia.

The total unfunded liabilities that have been promised to State, County and local Government employees is somewhere between $22 BILLION and $30+ BILLION dollars …….. and our Legislators have no frigging idea what to do about it ……… nor do they have any plans to address this problem within the next 15 to 20 years.

OH, the West Virginia Legislators, County and local elected officials all have “plans” that include these unfunded liabilities ……. but none of their plans address the “payoff” of the unfunded debt problem.

On the contrary, all the West Virginia Legislators, County and local elected officials all have “plans” that exacerbate said unfunded liabilities problem, ……. adding more to said unfunded debt each year, ……… by promising said Government employees substantial increases in salaries and entitlements in exchange for “their vote” to elect or re-elect said Official.

Our elected officials are akin to the worthless dead-beat husband who takes the family’s “weekly income” and spends it at the local bar trying to impress people and/or gambles it away in the Slot Machines and/or on the Poker Tables in hopes of becoming a “big winner” so that they can continue being a “player in the game”.

Their family members, the general public, suffer drastically because of their actions …….. but no one really gives a shit.

cheers

And if any of you partisan dumbshits want to criticize my judgment on the above, …….. I suggest you read the following before you exuberantly offer another public display of your ignorance and stupidity which has become a recognizable “trademark” of your contributions to these Forums over the past few years.

Candidates for the 32nd District of the House of Delegates are bracing to tackle the unfunded police and fire pension nightmare that's drained municipalities in recent years.

Last year, a bill was defeated that would have cut cities a break on unfunded police and fire pension liabilities.

The pension plans, which have a collective statewide shortfall of $659 million, were a contentious issue throughout the legislative session. The measure would have helped Charleston, which last year had an unfunded liability of $178 million.

Although the bill was passed by the Senate, it died in the House Finance Committee.

Delegate Ron Walters, R-Kanawha, said the issue was bound to resurface at the next legislative session. He said there's no surefire way to solve the problem without any negative effects.

"I expect this to swirl up again this year," Walters said at a Daily Mail editorial board meeting Tuesday. "For my money, everyone will have to suffer some."

Walters, 58, is running for an eighth term in the House. He operates an insurance agency.

Republican incumbent Patrick Lane acknowledged that the pension issue is growing out-of-hand.

"Small towns are going bankrupt because of pension plans," said Lane, 33, a lawyer.

http://www.dailymail.com/News/200809170197

Good to see you back at work, Sam.

Welcome back, Sam!