Lockport NY

From the LUSJ:

...It’s fair to say Peter is leaving because of a combination of office politics and my unhappiness with the pace of reassessment,” Tucker said. Galarneau has butted heads repeatedly with assessing department employees Lena Villella, real property appraiser, and Jessica Stopa, appraiser associate. Since last fall, Tucker said, one or both employees have accused Galarneau of: Violating union-set workplace rules that limit the amount of time the assessor is allowed to perform keyboarding work. While Villella was on vacation last year, Tucker said, Galarneau input photos of property into the city data base and surpassed his keyboarding time limit. Villella filed a grievance over it....

Then the Forbes article landed on my desk. It discusses the guaranteed public benefit packages and their cost to taxpayers.

...For New York City's 281,000 employees, average compensation has risen 63% since 2000 to $107,000 a year. New Jersey teaching veterans receive $80,000 to $100,000 for ten months' work. In California prison guards can sock away $300,000 a year with overtime pay. Four in five public-sector workers have lifetime pensions, versus only one in five in the private sector. The difference shifts huge risks from government to private-sector workers.

NYC socked away $20,000 per employee last year for pension benefits. Since 2000 its pension funding bill has risen nine fold, from $615 million to $5.6 billion in 2008.
That's more than the city spends on transport, health care, parks, libraries, museums and City University of New York combined, says the Citizens Budget Commission....

...Despite its huge contributions, New York City's five pension plans had only 74% of that actuaries said a year ago they need to pay future benefits. The recent financial meltdown lopped another 30% off the funds' value. If markets fail to roar back, taxpayers will have to save the day. After all, public pension benefits are enshrined in law. Don't you wish your 401(k) was?...

The recent market meltdown erased $1 trillion from municipal pension funds, Boston College's Center for Retirement Research figures. That has left the average public plan 35% underfunded. With benefits inexorably rising, the shortfall will balloon to 41% by 2013 if stocks and bonds stay at current levels, representing an unfunded liability of roughly $1.7 trillion, according to the Boston College center.

That's a lot less than Social Security's $11 trillion unfunded liability. But the feds have lots of wiggle room to lessen their burden by, say, raising the age at which you become eligible to draw benefits. Most public employees' benefits, by contrast, are set in stone.

"The tax hikes you face [to fully fund public pensions] will have a much more tangible impact on your financial life than anything a Social Security fix will entail," says Alicia Munnell, who runs Boston College's retirement center....

The last straw for the finances of Vallejo, Calif. came early last year when 18 cops and firefighters unexpectedly retired early. Under their contracts the city of 120,000 was immediately forced to pay them a total of $3.4 million. Already straining under an unpaid $219 million tab for pensions and health care, the city did something that may soon sound all too familiar: It filed for bankruptcy.

When government employees lobby for lavish pensions, it's typically under the notion that once granted the benefits can never be cut. A course in constitutional law would teach them that the Tenth Amendment limits federal officials' ability to order around local governments--a proscription that applies to U.S. Bankruptcy Court judges.

Under Chapter 9 of the bankruptcy code, cities can propose their own reorganization plans and void union contracts without fear that they will ever be forced to liquidate assets.

Chapter 9 filings have been rare in the past. New York City drew up Chapter 9 papers in 1975 and only backed away when its unions agreed to concessions. Orange County, Calif. filed in 1994 after a derivatives debacle.

With municipal governments under unusual stress, 2009 may see a spate of new filings, or threatened filings. If so, public pensions are likely to be lumped in with general obligations and everyone may be forced to live with less than 100 cents on the dollar. One observer who expects as much: Vallejo's bankruptcy attorney, Marc Levinson.

"Many municipalities are in deep trouble," he says. "What we don't know is how many will file Chapter 9."