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Municipal Pension Reform

State Budget Solutions | by Bob Williams | October 22, 2012

Bob Williams' Powerpoint presentation on the problem of unfunded municipal pensions and the possible reforms can be found here: Download file Municipal Pension Reform Powerpoint Presentation

Below are some of the highlights of the presentation.

To understand municipal pensions, it is important to know the extent of the problem. The worst municipalities with the unfunded pensions are:

Chicago (7)

44.8

41,966

New York City (5)

122.2

38,866

San Francisco (1)

8.7

34,940

Boston (1)

7.5

30,901

Detroit (2)

6.4

18,643

Los Angeles (3)

26.1

18,193

Philadelphia (1)

9.7

16,690

Cincinnati (1)

2.9

15,681

Baltimore (2)

3.7

15,420

Milwaukee (1)

3.4

14,853

When examining the municipalities in dire straits, it helps to know the year through which existing assets are adequate to pay accrued benefits:

City (# of pension systems)

Year

Philadelphia                   

2015

Boston (1)

2019

Chicago(7)  

2019

Cincinnati (1)

2020

Jacksonville (2)

2020

St. Paul (1)

2020

New York City (5)

2021

Baltimore (2)

2022

DeKalb County (1)

2022

Fulton County (1)

2022

Kern County (1)      

2022

It is no secret that many cities are near bankruptcy, including:

Camden, NJ as of 11/17/11
Chicago, IL as of 11/17/11
Cincinnati, Ohio as of 11/17/11
Detroit, MI as of 11/17/11
East Providence, RI as of 5/30/12
Hamtramck, MI as of 12/21/10
Harrisburg, PA as of 7/2/12
Honolulu, HI as of 11/17/11
Los Angeles, CA as of 11/17/11
Newark, NJ as of 12/21/10
New York, NY as of 11/17/11
N. Las Vegas, NV as of 6/23/12
Paterson, NJ as of 12/21/10
Providence, RI 6/19/12
Reading, PA as of 12/21/10  
San Diego, CA  as of 11/17/11
San Francisco, CA as of 11/17/11
San Jose, CA as of 11/17/11
Scranton, PA as of 7/7/12
Washington, DC as of 11/17/11
Woonsocket, RI as of 6/10/12

And other cities have a history of municipal bankruptcy, including:

City

Date Filed For Bankruptcy

San Bernardino, CA

July 10, 2012

Mammoth Lakes, CA

July 2, 2012

Stockton, CA

June 28, 2012

Jefferson County, AL

Nov. 9, 2011

Central Falls, RI

 Aug. 1, 2011

Vallejo, CA

May 23, 2008  In July 2011, the city won court approval to exit bankruptcy protection.

Orange County, CA

Dec. 1994 Emerged from bankruptcy after 18 months.

Mayors who want meaningful pension reform include the mayors of Chicago, Houston and Palo Alto.

For more information, please contact Bob Williams, President of State Budget Solutions, at bobwilliams@statebudgetsolutions.org.

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