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The Suddenly Poor Life: Millions Will Lose Their Pensions

Discussion in 'Coffee Shack (Daily News/Economy)' started by Goldhedge, Mar 4, 2016.



  1. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    Both of you make good points !
     
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  2. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Taez is right.............you both make good points.

    My experience with gov workers (I know a few) has been that they do not have a clue how most real businesses operate / how much the average worker bee is paid and what kind of benefits they have. Nor do they care. Not all, but most gov workers don't give 2 shits about anyone but themselves. They could care less about what their pay and benefits costs the average taxpayer. In fact most gov workers look upon the average citizen with disdain and hold us in contempt. They are out for themselves and will vote for anyone who will take good care of them. And it isn't going to change anytime soon.
     
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  3. latemetal

    latemetal Gold Chaser Platinum Bling

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    Actually, most gov workers understand the taxpayer is footing the bill and is to be treated with respect, that said, you can't make all the people happy at the same time, and some of our fellow citizens are bat-shit crazy. Sadly most people have no clue how a bureaucracy works and they get frustrated with the poor workers who are trying against almost overwhelming odds the get the work done.
     
  4. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    with
    You had me laughing with this one.

    I have been (still am) involved in situations ( mostly social situations) where I interact with a lot of local gov workers (mgmt., licensing, labor, LEO, etc) and I've heard them talk about regular citizens like they are garbage. In a lot of cases they have laughed out loud over problems / predicaments people contact them for help while saying "fuck the scum bags."

    Now there are a few who will go outta their way to help people. But I've found these to be few and far between.

    Edit: Here's a prime example of how much gov workers respect the average taxpayer:

    California man fights to have his DUI case based on a charge of driving under the influence of caffeine dismissed
    • Agent from California department of alcoholic beverage control pulled Joseph Schwab, 36, over on August 5, 2015 for allegedly driving erratically
    • Schwab was given a breathalyzer test that showed he had a 0.00 per cent blood alcohol level, but he was still arrested and booked into Solano County Jail
    • Toxicology blood test showed Schwab had no drugs in his system, but second test months later showed he had caffeine
    • Schwab was charged months later with the DUI offense based on caffeine and he's now fighting to have it dismissed


    Read more: http://www.dailymail.co.uk/news/article-4064616/California-man-fights-DUI-case-based-charge-driving-influence-caffeine-dismissed.html#ixzz4TrAfHWQc
    Follow us: @MailOnline on Twitter | DailyMail on Facebook
     
    Last edited: Dec 25, 2016
  5. latemetal

    latemetal Gold Chaser Platinum Bling

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    Reckless driving would have been the charge in other states, trust Cali to be different.
     
  6. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    I drive a 40 foot, 40,000 lb motorhome. If I get tired before I can find a rest area or RV park, I cannot legally pull over into a SAFE area to take a nap.
    I have talked my way out of tickets by using old time logic. "Officer, which would you like me to do, pull over in a safe area to get a nap or drive this 40,000lb missile into someone because I was sleepy." Because I don't put out the slides, nor have chairs outside, they buy my story & give me 4 hrs. to sleep.
    This poor guy was probably tired, got a strong coffee from Mac D's (ohh shit another coffee law suit), and was just drifting a bit from line to line. I know the Solana Beach area quite well & the CHP there are assholes. I have had that experience down there, but I was able to talk my out of a ticket, but that was 20 years ago, things have changed. The cops are far more ticket quota oriented than back then. It's not about safety, it's about $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
     
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  7. mtnman

    mtnman Gold Member Gold Chaser Site Supporter

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    Here's a trick I used when we were full timing in our Bus. This works in the evening and gives you all night to stop. I had a switch, hidden, that controlled the headlights. Pull into the rest area and flip the switch. When the Cops come to run you off, show them that the lights aren't working and promise to have them fixed first thing in the morning. Never had a Cop make me leave without headlights!
     
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  8. Buck

    Buck Fabian Society Gold Chaser

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    Pensions in trouble now?
    Just wait till the markets correct

    There might be some bargains waiting around the corner:2 thumbs up:
     
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  9. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    mtnman, that is NICE !!! I will "fix" my headlights with a switch !! Thanks
     
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  10. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    I'm wondering what will happen to people if the s really htf pension wise? Will they be told.............sorry Charlie or will there be gov bailouts?

    Could be a total mess if something isn't done.
     
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  11. Buck

    Buck Fabian Society Gold Chaser

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    Would that be a great time to helicopter some money into "main street"?
    Pensions wiped out and the gov gives us $300 each

    We've lived through the times where this has happened and the gov gave each bank $100b so $300 should be a piece of cake

    Hmmmm - I wonder what spot price will be then?
     
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  12. Uglytruth

    Uglytruth Gold Member Gold Chaser

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    Naaaaaaaaaaaaa pensions are to big to fail. Groundwork already laid down & in place.
     
  13. arminius

    arminius Gold Member Gold Chaser Site Supporter

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    Riiighttttttt........

    We'll see how long that lasts...


    And how much more they'll ask for all their various permissions just to function.


    And how the POG is related to that, I'd love to see...

    That's prop the n#1 question the pundits are attempting to answer...
     
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  14. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    "It's Corruption On Steroids" - A Look Inside The El Monte, California Public Employee Pension

    [​IMG]
    by Tyler Durden
    Jan 1, 2017 4:05 PM


    El Monte, California is a city of roughly 100,000 residents in East Los Angeles, many of whom struggle to make ends meet with a median household income of ~$39,000 and nearly 25% of people living below the poverty line. But while most of the people of El Monte struggle to meet monthly expenses, the city's public employees are living the high life courtesy of one of the most egregious taxpayer funded pension plans in the country. Just ask the retired City Manager, James Mussenden, who told the LA Times that he gets paid $216,000 per year in retirement to tour the world on extravagant golf trips.

    The retired city manager of El Monte collects more than $216,000 a year, plus cost-of-living increases and fully paid health insurance.

    “It’s giving me an opportunity to do a number of things I didn’t get to do when I was younger, like travel to Europe, take some things off my bucket list,” Mussenden, 66, said recently. He even flew to Scotland to play the famed Old Course at St. Andrews, a mecca for golf enthusiasts.

    Mussenden recognizes that few Americans have pensions anymore — least of all the El Monte taxpayers who are funding his retirement. So while he enjoys his monthly retirement check, he’s discreet about it.

    “The guys I play golf with, they get very angry about my pension because they don’t have anything like it,” he said.

    El Monte’s total retirement costs for public employees in 2016 totaled $16.5 million, or a staggering 28% of the city’s total budget.

    But taxpayer funded pension payouts weren't always so generous in El Monte. A fact that changed in 1999 when a decade-long bull market tripled the value of California's massive public pension fund, CalPERS. Of course, the CalPERS board of directors, dominated by public employee union leaders and their political allies, voted to spend the surplus lowering retirement ages and raising pensions for public employees all across the state.

    Unfortunately, the CalPERS board was blinded by endless wall street reports suggesting that "pets.com" was worth at least $1 trillion and forgot that markets actually cycle. Alas, shortly after granting 200,000 civil servants sweet new retirement packages, at the absolute peak of the market, the tech bubble burst and CalPERs found itself in a crisis that still plagues the state to this day.

    California Highway Patrol officers got an especially sweet deal. Their pensions had been 2% of their highest salaries, multiplied by the number of years they worked. The percentage of peak salary was raised to 3%.

    That meant officers with 30 years of service could collect up to 90% of their highest pay for life. And they would be eligible to retire at 50.

    El Monte adopted the new pension formula (known as “3% at 50”) in 2000, and the effect was dramatic. Officers who retired before 2000 with more than 25 years of service collect $82,000 a year on average, according to CalPERS data.

    Those who retired after 2000 collect an average of $120,000.

    [​IMG]

    But former City Manager Harold O. Johanson didn't think it was "fair" that police officers got a sweetened retirement deal while other city employs had their pensions capped at two-thirds of their final salary. So he set out to implement a "supplemental plan" for other El Monte public employees that would boost their retirement checks by ~50%. Johanson subsequently retired three years later, at 58, and now collects $250,000 per year from taxpayers putting him in the top one-hundredth of one percent of all public pension recipients in California.

    The idea for the supplemental plan arose in 2000, after the city council granted El Monte police officers the right to retire with up to 90% of their highest salary guaranteed for life.

    But it created a gap between El Monte police and the city’s non-uniformed employees: Under CalPERS rules, civilian pensions were capped at two-thirds of final salary.

    It would boost civilians’ retirement checks by 50% and put their pensions nearly on a par with police. The city council approved the idea in May 2000, unanimously and without public debate.

    Johanson retired three years later, at 58. Today, he is the top beneficiary of the program he championed, collecting a combined pension of more than $250,000 per year, state and city records show. That puts him in the top one-hundredth of one percent of all public pension recipients in California.

    But sweet pensions aren't the only perk afforded to El Monte public employees who also get Fridays off if they work 10 hours per day Monday - Thursday and annual cost of living adjustments of up to 5%

    El Monte has a history of generous employee benefits — including a four-day work week for civil servants, who put in 10 hours a day and have Fridays off. Liberal pension provisions are another part of that tradition.

    Under state law, police are supposed to contribute 9% of their paychecks toward their pensions, and civilian workers 7%. But El Monte covers the employee contribution as well as the employer share, a legacy of collective bargaining agreements dating to the early 1980s.

    On top of that, retired El Monte employees receive annual cost of living increases at the high end of what CalPERS allows: up to 4% for police retirees and 5% for civilians, depending on inflation. Most CalPERS pension recipients receive increases of 2% annually.

    Benefits that lavish do not come cheap: For every $100 the city paid a police officer in 2016, it had to pay an additional $71 to CalPERS to fund payments to current and future retirees.

    Perhaps at some point we can all stop talking about "Russian hackers" and actually focus on the real corruption plaguing our country.

    http://www.zerohedge.com/news/2017-01-01/
     
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  15. latemetal

    latemetal Gold Chaser Platinum Bling

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    The pigs at the top are a lot more equal than others...this sucks.
     
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  16. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    Obviously misappropriation of funds !!!
    All these ASSHOLES need to be behind bars !
     
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  17. Uglytruth

    Uglytruth Gold Member Gold Chaser

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    16 years later eight of zero interest rates.......... what 30-100% returns won't continue forever?
     
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  18. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    Look for an increase in:
    property taxes
    sales tax
    state income tax
    gasoline tax
    business tax (city & county)
    This the short list !!!
     
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  19. latemetal

    latemetal Gold Chaser Platinum Bling

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  20. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Dallas Pension Not Only "Ticking Time Bomb Ready To Explode," Public Policy Director Warns

    [​IMG]
    by Tyler Durden
    Jan 3, 2017 4:15 AM


    For months, if not years, we've warned that conflicted politicians and union bosses pursue a perverse set of goals in their management of pension funds, most of which have nothing to do with the application of sound financial principles. Here's how we summarized the situation back in the summer (see "An Unsolvable Math Problem: Public Pensions Are Underfunded By As Much As $8 Trillion"):

    Defined Benefit Pension Plans are, in many cases, a ponzi scheme. Current assets are used to pay current claims in full in spite of insufficient funding to pay future liabilities... classic Ponzi. But unlike wall street and corporate ponzi schemes no one goes to jail here because the establishment is complicit. Everyone from government officials to union bosses are incentivized to maintain the status quo...public employees get to sleep better at night thinking they have a "retirement plan," public legislators get to be re-elected by union membership while pretending their states are solvent and union bosses get to keep their jobs while hiding the truth from employees.

    Then, just a couple of weeks ago, CalPERS confirmed our fears when they chose to lower their discount rate by only 50bps to 7%, nearly a full point above their 6.2% projected annual returns over the next decade. Even more startling was the open admission from Richard Costigan, chairman of the CalPERS finance committee, that the decision was motivated by the board's desire to maintain the ponzi, saying: "this is just a start...municipalities and other government agencies need some breathing room before they absorb the impact."

    Apparently we're not the only ones growing increasingly concerned about the lack of financial discipline within these massive pension funds. Lawrence Person's BattleSwarm Blog recently interviewed the Director of the Texas Public Policy Foundation, James Quintero, who noted that many of the nation's largest pensions are relying on "fuzzy math to make them work, or at least give the appearance of working."

    When it comes to Texas’ public retirement systems, one of my greatest concerns is that there are other ticking time-bombs, like the DPFP, out there getting ready to explode. It’s not just Dallas’ pension plan that’s taken on excessive risk to chase high yield in a low-yield environment.

    Setting aside the issue of risk for a moment, the DPFP, like most other public retirement systems around the state, suffers from a fundamental design flaw. That is, it’s based on the defined benefit (DB) system, which guarantees retirees a lifetime of monthly income irrespective of whether the pension fund has the money to make good on its promises or not. This kind of system is akin to an entitlement program, warts and all, and is very much at the heart of pension crises brewing in Texas and across the country.

    One of the biggest problems with DB plans is that they rely on a lot of fuzzy math to make them work, or at least give the appearance of working. Take the issue of investment returns, for example. Many systems assume an overly optimistic rate of return when estimating a fund’s future earnings. Baking in these rosy projections is, among other things, a way to understate a plan’s pension debt.

    The common element in most, if not all, of these systemic failures is the defined benefit pension plan. Because of the political element as well as the inclusion of inaccurate investment assumptions in the DB model, these plans are almost destined to fail, threatening the taxpayers who support it and the retirees who rely on it. And sadly, that’s what we’re witnessing now across the nation.

    Unfortunately, as Quinterro points out, when all those bad assumptions about future returns finally prove to be wildly optimistic it will be taxpayers left holding the bag.

    Let me preface this by saying that I’m not a lawyer nor do I ever intend to be one. However, Article XVI, Section 66 of the Texas Constitution plainly states that non-statewide retirement systems, like DPFP, and political subdivisions, like the city of Dallas, “are jointly responsible for ensuring that benefits under this section are not reduced or otherwise impaired” for vested employees. Given that, it’s hard to see how the city of Dallas—or better yet, the Dallas taxpayer—isn’t obligated in some major way when their local retirement system reaches the point of no return, which may be a lot closer than people think given all the lump-sum withdrawals of late.

    Asked whether other large pensions in Texas were as bad off as the Dallas Police and Fire Pension, Quinterro said simply, "If you’re a taxpayer or property owner in one of Texas’ major cities, I’d be concerned."

    A quick review of where some of Texas' largest pensions stand, after one of the biggest bull market runs in history, helps explain Quinterro's pessimism:


    [​IMG]

    While "fuzzy math" can help these ponzi schemes elude the inevitable for a very long time, at some point they will eventually collapse. And, with $6-8 trillion in outstanding liabilities at U.S. public pensions alone, we suspect the consequences of that collapse will not be pleasant.

    http://www.zerohedge.com/news/2017-...mb-ready-explode-public-policy-director-warns
     
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  21. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    Well said !!
     
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  22. southfork

    southfork Mother Lode Found Mother Lode

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    Hells Bells Taezzar, these happen yearly now.
     
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  23. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    OK, I will change it:

    Look for A MUCH BIGGER increase in:
    property taxes
    sales tax
    state income tax
    gasoline tax
    business tax (city & county)
    This the short list !!!
     
  24. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  25. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    Searcher, I read the article on Philly tax, a guy bought a gallon of ice tea and paid more in tax than for the tea. His complaint was the tax should have been "hidden" meaning the total price should have been on the shelf. Hmmm.
    As the trend for actual taxpayers fleeing the urban areas of America continues, wtf is going to be paying those pensions and salaries in the government sector?
     
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  26. latemetal

    latemetal Gold Chaser Platinum Bling

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    Bootleg cigarettes and ice tea, driving money to the Mafia...
     
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  27. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    I know a whole lotta peeps who live in Philly but won't be shopping there any more..................

    Masses Shocked By Philly Beverage Tax Impact

    [​IMG]
    by Tyler Durden
    Jan 5, 2017 5:10 AM

    Submitted by Jim Quinn via The Burning Platform blog,

    Check out this receipt and you realize why the country just elected Donald Trump. Liberal Democrat scumbag mayor Jim Kenney and his entirely Democrat city council thought it was a brilliant idea to ram a beverage tax down the throats of Philadelphians last year. They were doing it for the chilruns. It’s always for the chilrun. The ignorant masses bought the load of bullshit because they don’t understand maff. They understand it now. The tax went into effect on January 1 and the sticker shock is infuriating the ignorant masses.

    This receipt for a 10 pack of flavored water shows a 51% beverage tax. It gets even better. PA has a sales tax of 6%. Philly already charges another 2% (for the chilruns) to make the sales tax 8%. These bastards now charge the 8% on the original price plus the beverage tax. Last week this purchase came to $6.47. Today it is $9.75.

    [​IMG]

    Now ask yourself, who drinks the most sugary drinks? That’s right. Obese uneducated poor people who are likely to be scraping by on food stamps or very low incomes. Kenney and his liberal minions have fucked over their main voters. This tax is going to drive grocery purchases outside the city and hurt small restaurant owners. It isn’t benefiting kids. It’s funding the bloated pensions of teachers and government employees. Overall tax revenue will decline. Democrats are complete idiots when it comes to economics. Taxing their people to death is destroying Philly.

    As a side note, PA, which already had the highest gas tax in the country, increased it by another 8 cents per gallon on January 1. I’m sure the corrupt PA Dept of Transportation will spend the millions wisely on bloated union construction contracts for sub-par work that is only two years late getting completed. Happy New Year from Taxylvania!!!!

    Philadelphia rang in the new year with a controversial new beverage tax on soda and other sugar-sweetened drinks. The tax, which went into effect on Sunday, is the first one of its kind in a major city in the United States.

    While the tax is technically 1.5 cents per ounce, which doesn’t sound too terrible, when buying a 10-pack of 20 oz bottles those numbers climb pretty quickly. In this case, a 10-pack of Propel flavored water that originally retailed for $5.99 had an additional three dollars tacked on to it in taxes.

    Chuck Andrews picked up a $1.77 gallon jug of tea, got home and looked at his receipt.

    “When I read the receipt I’m like, ‘Wait a minute. I paid more in tax than I did for the product,'” Andrews said.

    The tax on the $1.77 gallon of tea was $1.92 cents.

    “Which is OK if you had told me,” he said.

    Andrews’ point is he would rather have the full cost, the product and the tax inclusive, posted on the main shelf tag.

    A customer at a Save-A-Lot on Woodhaven Road snapped a picture of a 12-pack of diet green tea and the price surge of what normally costs $4.99. It’s now $8.03.

    [​IMG]

    The money generated from the tax will help fund Mayor Jim Kenney’s Pre-K program.

    “I understand that the school systems need money, but there’s other ways to go about it than to make such a drastic increase on soda,” Elena Porsch of South Philadelphia said.

    The mayor’s office tells Action News, “The tax is on the distribution of sweetened beverages from companies like Coca-Cola to dealers like supermarkets, and because it’s not a sales tax… distributors don’t have to pass it on to customers.”

    Small businesses like Franzones in Manayunk have already been getting an earful from customers about the higher prices and wonder what this will mean for their future.

    “The businesses take a hit with profits, the customers take a hit with payment, and it’s kind of a lose-lose in Philadelphia with this tax,” Mike Maziarz of Franzones said.

    Many people are saying they will go out of Philadelphia rather than pay the tax. Others say they will change what they buy.

    “So now I know. I’m buying water, water, water,” Carl Saulsbury of North Philadelphia said.

    It’s also important to note, if grocery stores purchased these taxable beverages last week from their distributors, then the soda tax wouldn’t apply. But if the beverages were purchased on the first of January or after, it would.

    * * *

    Philadelphia is not alone. As the WSJ adds, Bay Area voters in San Francisco and Oakland also approved a penny-per-ounce tax on sugary beverages, the same rate as Berkeley’s. And Boulder, Colo., residents, approved the nation’s steepest soda levy, at two pennies an ounce—or a $1.35 extra—for a two-liter bottle. Those taxes are taking effect in coming months.

    “They represent a new frontier of tax policy,” said Scott Drenkard, director of state projects for the Tax Foundation, a think tank that favors lower taxes. Soda taxes, he said, are “very stark examples of state and local governments using the tax code to influence nutrition choices, which are by definition very personal.”

    Supporters of the taxes say the levies encourage people to drink healthier beverages. Instead, the newly implemented surcharges will likely just lead to a lot of very angry (sur)taxpayers.

    http://www.zerohedge.com/news/2017-01-04/
     
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  28. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Philadelphia's new beverage tax could pour business into Bucks, Montgomery counties
    Bensalem Beer & Soda is expecting to get more customers in the coming weeks, thanks to the Philadelphia Beverage Tax that took effect this week, the store manager said Wednesday.

    "We are bulking up on supplies to be ready just in case," store manager Andrea Siegfried said. The store is restocking Snapple products, which were discontinued because the drinks didn't sell well. Managers expect that to change once Philadelphia residents start looking for less expensive alternatives to beverages sold and taxed in the city.

    Customers in city stores now have to pay a 1.5-cent tax for each ounce of sweetened beverage. The tax is imposed on distributors, and the fee is embedded into the price stores pay for soda, iced tea, sports drinks, energy drinks and almond milk, for example. The stores then pass the tax on to their customers.

    So, a 20-ounce bottle of soda will be assessed 30 cents for the beverage tax and a 12-pack of 12-ounce cans of soda will have an extra $2.16 tacked on to the price. The beverage tax is applied before Philadelphia's 8 percent sales tax, so a 20-ounce Dr. Pepper selling for $1.99 before taxes ends up costing $2.47, after the 30-cent beverage tax and 18-cent sales tax are added.

    The Bensalem Beer & Soda store off Hulmeville and Street roads has been receiving a lot of calls and emails from Philadelphia residents inquiring about what they stock, Siegfried said.

    "With us being so close to the border, we will definitely benefit from it. But the city is really hanging itself with the extra taxes," she said. "It's crazy."

    Pat Katsox is among the Philadelphia residents who vow to head to the suburbs to buy beverages.

    "I refuse to pay for it," Katsox said Wednesday as she was helping friends load their car with an order from ShopRite in Morrell Plaza off Frankford Avenue in Northeast Philadelphia.

    "Why would I pay that for the price of a soda?" Katsox said.

    The ShopRite off Frankford Avenue is a short distance from the Bensalem border. Late Wednesday morning, business was bustling, but few customers appeared to leave the store with any cans or bottles of soda or other sweetened beverages.

    The store, part of the Wakefern Food Cooperative, is trying to be as transparent as possible about the tax, spokeswoman Karen Meleta said Wednesday morning. Notices are posted near the beverages about how much the new tax will add and store receipts include a breakout with the total beverage tax charged.

    ShopRite is not applying taxes to items on sale in this week's and next week's circulars, Meleta said, because the ads had been produced before it was clear the beverage tax was going to kick in Jan. 1. If the items are not in the circular, the tax is being assessed.

    ShopRite staff members are hearing from customers that they will do their shopping outside the city, Meleta said.

    "It is going to impact our business, there's no question about that," she said. "If people cross the city lines to get the beverages, then they could do their other shopping there, too. It could have a long-term impact on the city. It is a very burdensome tax. It is not insignificant."

    Fink's Hoagies, at Princeton and Torresdale avenues in Northeast Philadelphia, announced Wednesday it is protesting the tax by refusing to sell sweetened beverages.

    The tax is also having an impact on some suburban businesses.

    Mike Piccinini, manager of Hatboro Beverages in Hatboro, said he's back in the market for a birch beer distributor, because the tax is stopping the distributor he has in Philadelphia from producing kegs of the soda often served at graduation parties and private business events.

    "The birch beer kegs are 15½ gallons," Piccinini said Wednesday. "(The Philadelphia distributor) stopped producing it. It wasn't worth it. It would be a tough sell (with the $30 extra tax)."

    The store manager said he is trying to line up a distributor from the suburbs in time for the upcoming party seasons to be able to offer the kegs.

    Most of the estimated $90 million expected to be collected in the first year from the Philadelphia beverage tax will be used to help fund the city's prekindergarten programs, community schools and recreation centers, officials said.

    The Associated Press contributed to this report.

    Enjoying our content? Become a Bucks County Courier Times subscriber to support stories like these. Get full access to our signature journalism for just 33 cents a day.

    Joan Hellyer: 215-949-4048; email: jhellyer@calkins.com; Twitter: @BCCTintheknow

    http://www.buckscountycouriertimes....cle_12ad5da2-d2c1-11e6-a97d-d305c019bf84.html
     
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  29. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    Those democrats sure do know how to destroy private enterprise.
     
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  30. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Several years ago Philly enacted a crazy tax on cigs. Right afterwards all the places that sold cigs in the counties surrounding Philly were mobbed. They couldn't order enough cartons to keep up with the demand. I guess they didn't learn from that one.
     
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  31. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  32. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Welcome To The Third World, Part 21: This Pension Thing Is About To Get Real

    January 14, 2017 4 Comments


    “The problem with police officers and firefighters isn’t a public-sector problem; it isn’t a problem with government; it’s a problem with the entire society. It’s what happened on Wall Street in the run-up to the subprime crisis. It’s a problem of people taking what they can, just because they can, without regard to the larger social consequences. It’s not just a coincidence that the debts of cities and states spun out of control at the same time as the debts of individual Americans. Alone in a dark room with a pile of money, Americans knew exactly what they wanted to do, from the top of the society to the bottom. They’d been conditioned to grab as much as they could, without thinking about the long-term consequences.”
    Michael Lewis, Boomerang: Travels in the New Third World

    Though it may not be instantly clear, in the above quote Michael Lewis is talking about public sector pensions and how over the course of several decades, mayors and governors across the US have colluded with police, firefighter and teachers unions to promise outrageously-generous benefits and then failed to put aside enough money to pay for them.

    As a consequence two things are happening. In dozens if not hundreds of cities and towns, services are being cut to the bone to pay for ballooning pension benefits, and – when even these cuts prove inadequate – pensions are being drastically reduced.

    Which in turn means two other things. First, life isn’t nearly as easy or pleasant as it used to be in a lot of places, as library hours are cut, trash piles up and police response times lengthen. And second, hundreds of thousands of public sector workers who expected to retire comfortably are staring at major lifestyle shrinkage.

    To which a reasonable person might yawn and say, sure the numbers look grim. But they’ve looked that way for a long time and outside of Chicago, American life is still pretty good by Greek, Venezuelan or Russian standards. So go away until something tangible actually happens.

    Point taken. But this might be that time. Beginning with Dallas, where the city is actually taking money back from plan recipients…

    Dallas Police and Fire pension members may have to pay back funds
    The city has agreed to put in an additional billion dollars over 30 years, but they’re proposing a series of bitter pills to make up the rest of the nearly $4 billion shortfall.

    The bitterest pill: A proposal to take back all of the interest police and firefighters earned on Deferred Option Retirement accounts, or DROP. That would amount to an additional billion dollars saved. The city is calling it an “equity adjustment.” Retirees call it an illegal “claw back.”

    The city is also seeking to “equity adjustment” on cost of living increases. The city says that pension checks are about 20 percent higher than they would have been if increases had been tied to inflation.

    The city’s proposing to freeze cost of living increases until it catches up to the inflation index.

    …and moving on to Kentucky, where if a funding level of 16% for the state employees fund isn’t an imminent crisis, then nothing is:

    [​IMG]

    Things are if anything even bleaker in the private sector:


    Multiemployer Pension Plans In Crisis: Troubled Plans Need Public Resources To Survive
    (Forbes) – There is an emerging financial crisis among multiemployer pension plans in America. These plans are a subset of private sector defined benefit pensions covering 10 million workers and retirees. Most critical are the projected bankruptcies of the Teamsters Central States and the United Mineworkers of America plans, making front page news for the last several months.

    Multiemployer plans are insured by the US Federal Government’s Pension Benefit Guaranty Corporation (PBGC). But PBGC is itself in danger of going broke. Set up in 1974 to “encourage the continuation and maintenance of voluntary private defined benefit pension plans [and] provide timely and uninterrupted payment of pension benefits,” the plan uses the ultimate backstop to provide those guarantees: the U.S. taxpayer.

    In the fiscal year 2015, PBGC paid out nearly $6 billion in benefits to participants of failed pension plans, increasing the agency’s deficit to $76 billion. The PBGC now has $164 billion in obligations and just $88 billion in assets.

    When this was reported to Congress, it passed the Kline-Miller Multiemployer Pension Reform Act of 2014, allowing pension plans to ask permission to cut benefits to its plan participants. Prior to 2014 those plans weren’t allowed to do so. But actuaries looking into the PBGC reported that unless something was done, the PBFC itself would be broke in less than a decade.

    The door is now open for other pension plans facing similar shortfalls to apply for permission to cut benefits to their participants. The ripple effect could be enormous: PBGC is the ultimate backstop for some 22,000 single-employer pension plans and another 1,400 multi-employer pension plans covering 40 million participants.

    Some other relevant headlines:

    CalPERS Cuts Pension Benefits For First Time

    Ohio workers face precedent-setting pension and retiree health cuts

    Teamsters’ Pension Plans Seek Massive Cuts to Retirees to Stay Solvent

    Chicago’s massive unfunded pension deficit could swallow the city

    And this, remember, is happening at the tail end of a 30-year bull market in bonds and a 7-year bull market in stocks, which took the main asset classes held by pension funds to record valuation levels. So the rubber truly meets the road during the next recession when stocks will, if history is a reliable guide, drop by 20% or more. The current gaps in thousands of pension funds will become gaping holes, and the experience of Teamsters and Dallas cops will be replicated across the country.

    Click here for the previous posts in this series

    http://dollarcollapse.com/pension-funds/pensions-thing-gets-real/
     
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  33. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    Thanks searcher.
    This issue has been wholly owned by the Demoncrats here. They took the money that was supposed to go to the pension fund and blew it, starting around 2000. Then they have fought the Republicans who are trying to fix it. Now that the Republicans have a majority in both houses for the first time in a 100 years, plus the Governor, maybe I hope it can be fixed. I am prepared to be disappointed, but will be happy if there are changes.
    I have mentioned before my DIL is a Kentucky HS teacher, she has no clue about this situation. So much for the employees being informed about their future. They are actually clueless.

    The Demoncrats fought the governor every step of the way on the above money he put into the fund.
     
    Last edited: Jan 14, 2017
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  34. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    I planned my own retirement from a young age. I only have SS (no choice) & my own plan.
    I did this without a kolege digree. I deprived myself of drugs, excessive alcohol & gambling, keeping up with the "Jones's",
    AND giving me what "I deserve", actually I got what I deserved, a semi comfortable retirement.
    If I could do it, anyone can do it.

    The problem is, these parasites on the tax dollar believe they are "entitled" to lavish retirements, when, in fact, they should get no more than 30% of their straight time wages. They should have to save/plan for any more than that, just like anyone else.

    The other problem is that they are spending OPM !!!

     
  35. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    These lying parasitic POS politicians/government workers continue to use/abuse children (schools). REMEMBER we were told to vote for the lottery (lotto) because, if it passed, we would NEVER again need money for the schools.
    I am REALLY TIRED of the continuing lies & bullshit !!
     
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  36. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    Yeah, we got the "school lotto" here but the county school system is taxing anything and everything and jacking up the property taxes. Not sure what the lotto is paying for. Also the FedGov dumped millions on the local school system for "impact" of a brigade combat team, which left almost right away, so no impact. The really sad part was when FedGov paid huge money to rebuilt the access roads going to Fort Knox and a brand new divided highway to Etown, God only knows how much they paid, for the same "impact" of the BCT. Almost to the day, the roads opened and they announced the BCT was leaving Fort Knox in a couple of months, and it did. Talk about pork barrel.
     
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  37. edsl48

    edsl48 Silver Member Silver Miner

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    They fed us the same blarney in Illinois about the lottery money going to the schools. It passed and the money went to the schools. However the amount that went to the schools from the State General funds was cut in an equal amount meaning the schools got the same funding in dollars while the usual bunch of Politicians got a huge windfall. Amazingly to this day people say "why do schools need money with the lottery money going to the schools?" Next on the agenda is a new "sales tax to fund school buildings." Based on past results we can see how that is going to work. Funny thing though is how so many that have been duped fall for the same old song and dance again.
     
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  38. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    Being from Illinois I feel you edsl48.

    My BIL lives in a little town NW of Chicago. A local politician had a relative that got a masters in library science. They put a new library on the ballot for the town and the people voted it down overwhelmingly. Yet they found a way to get it anyway, and there it sat. He showed it to me, nice modern building, large parking lot, one car parked there. You guessed it. The head librarian, the politician's relative.
     
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  39. Goldhedge

    Goldhedge Modal Operator/Moderator Site Mgr Site Supporter

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    Same thing happened in Colorado. The politicians used the wording in the legislation that allowed LOTTO to say "well, it never said it would ALL go to the parks."

    They were taking lotto money to build prisons. Next election the TAxpayer Bill Of Rights (TABOR) was put to the vote.

    That restricts the government to restricts revenues for all levels of government (state, local, and schools).[2] Under TABOR, state and local governments cannot raise tax rates without voter approval and cannot spend revenues collected under existing tax rates without voter approval if revenues grow faster than the rate of inflation and population growth.
    Also the lotto money was redirected to the parks as it was "sold" to the people.

    The politicians got their ears pinned back!

    true power.jpg
     
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  40. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    The Dallas Pension Fiasco Is Just The Beginning

    [​IMG]
    by Tyler Durden
    Jan 17, 2017 11:16 PM


    Submitted by Jonathan Rochford via Narrow Road Capital,

    The recent blow-up of the Dallas Police and Fire Pension System was entirely predictable. Whilst it is tempting to blame unusual circumstances for the recent lock-up of redemptions and likely substantial reductions to pensions for those still in the fund, many other American pension funds are heading down the same road. The combination of overpriced financial markets, inadequate contributions and overly generous pension promises mean dozens of US local and state government pension plans will end up in the same situation. The simple maths and political factors at play mean what happened at GM, Chrysler, Detroit and now Dallas will happen nationwide in the coming decade. So, what’s happened in Dallas and why will it happen elsewhere?

    Background to the Dallas Pension Fiasco

    The Dallas pension scheme has been underfunded for many years with the situation accelerating recently. As the table below shows, as at 1 January 2016 the pension plan had $2.68 billion of assets (AVA) against $5.95 billion of liabilities (AAL), making the funding ratio (AVA/AAL) a mere 45.1%. Despite equity markets recovering strongly over the last seven years, the value of the assets has fallen at the same time as the value of the liabilities has grown rapidly. The story of how such a seemingly odd outcome could occur dates back to decisions made long before the financial crisis.

    [​IMG]
    Source: Dallas Police and Fire Pension System

    In the late 1990’s, returns in financial markets had been strong for years leading many to believe that exceptional returns would continue. In this environment, the board that ran the Dallas plan decided that more generous pension terms could be offered to employees and that these could be funded by the higher expected returns without needing greater contributions from the Dallas municipality and its taxpayers. Exceptionally generous terms were introduced including the now notorious DROP accounts and inflated assumptions for cost of living adjustments (COLA). These changes meant that pension liabilities were guaranteed to skyrocket in future years, whilst there was no guarantee that investment returns and inflation levels would also be high. Dallas police and fire personnel were being offered the equivalent of a free lunch and they took full advantage.

    In the 2000’s the pension plan made some unusual investment decisions. A disproportionate amount of plan assets were invested in illiquid and exotic alternative investments. When the financial crisis struck these assets didn’t decline as much as the assets of other pension plans. However, this was merely a deferral of the inevitable write downs which came in the last two years after a change in management.

    Recent Events

    Throughout 2016 the pension board, the municipality and the State government bickered over who was responsible and who should pay to fix the mess. The State government blamed the municipality for the poor investment decisions. The municipality blamed the State government for creating a system that it could not control but was supposed to be responsible for. It also blamed the pension board for the overly generous changes they implemented. The pension board recognised the huge problem but offered only minor concessions arguing that plan participants were entitled to be paid in full in all circumstances. They asked the municipality for a one-off addition of $1.1 billion, equivalent to almost one year’s general fund revenue for the municipality.

    As the funding ratio plummeted during 2016, plan participants became concerned that their generous pension entitlements might not be met. In other pension plans the employer might increase its contributions when these circumstances occurred, but in Dallas the municipality was already paying close to the legislative maximum. Police officers with high balances retired in record numbers, pulling out $500 million in four months in late 2016. Those who withdrew received 100% of what was owed, with those remaining seeing their position as measured by the funding ratio deteriorate further.

    In November, when faced with $154 million of redemption requests and dwindling liquid assets, the pension board suspended redemptions. The funding ratio is now estimated to be around 36% with assets forecast to be exhausted in a decade. Litigation has begun with some plan participants suing to see their redemption requests honoured. The municipality has indicated it wants to claw back some of the generous benefits accrued since the changes in the 1990’s, though this is likely to only impact those who didn’t redeemed. The State has begun a criminal investigation. Everyone is looking to blame someone else, but not everyone has accepted that drastic pension cuts are inevitable.

    The Interplay of Political Decisions and Financial Reality

    The factors that led to Dallas pension fiasco are all too common. Politicians and their administrations often make decisions that are politically beneficial without taking into account financial reality. A generous pension scheme keeps workers and their unions onside, helping the politicians win re-election. However, the bill for the generosity is deferred beyond the current political generation, with unrealistic assumptions of future returns enabling the problem to be obscured. As financial markets tend to go up the escalator and down the elevator it is not until a market crash that the unrealistic return assumptions are exposed and the funding ratio collapses.

    This is when a second political reality kicks in. In the case of Dallas, there are just under 10,000 participants in the pension plan compared to 1.258 million residents in the municipality. Plan participants therefore make up less than 1% of the population. If the Dallas municipality chose to fully fund the pension plan it would be require an enormous increase in taxes from the entire population in order to fund overly generous pensions for a very small minority of the population. For current politicians, it is far easier to blame the previous politicians and the pension board for the mess and see pensions for a select group cut by half or more than it is to sell a massive tax increase.

    The legal position remains murky and it will take some time to clear up. The municipality is paying 37.5% of employee benefits into the pension plan, the maximum amount required by state law. Without a change in state legislation, it seems likely that the pension plan will have to bear almost all of the financial pain through pension reductions. If state legislation was changed to increase the burden on the municipality years of litigation could ensue with the potential for the municipality to declare bankruptcy as a strategic response. The appointment of an administrator during bankruptcy could see services reduced and/or taxes increased, but pension cuts would be all but a certainty.

    Dallas Isn’t the First and Won’t be the Last

    It’s tempting to see the generous pension structure and bad investment decisions in Dallas as making it a special case. Detroit was seen by many as a special case when it went into bankruptcy in 2013 as it had seen its population fall by 25% in a decade. This depopulation left a smaller population base trying to fund the debt and pensions obligations incurred when the population was much larger. Growing debt and pension obligations are signs of what is to come for many local and state governments who have been living beyond their means for decades.

    As well as building up pension obligations many US governments have been accruing explicit debt. The two are intertwined, with some governments issuing debt to make payments into their pension plans, often to close the underfunding gap. This is very much a short-term measure, as whether it is pension contributions or debt repayments both will either require high taxes and/or lower spending on government services in the future in order for these payments to be met.

    Pew Charitable Trusts research estimates a $1.5 trillion pension funding gap for the states alone, with Kentucky, New Jersey, Illinois, Pennsylvania and California going backwards at a rapid rate. Using a wider range of fiscal health measures the Mercatus Center has the five worst states as Kentucky, Illinois, New Jersey, Massachusetts and Connecticut. The table below shows the five state pension plans in Illinois, with an average funded ratio of just 37.6%.

    [​IMG]
    Source: Illinois Commission on Government Forecasting and Accountability

    For cities, Chicago is likely to be the next Detroit with the city and its school system both showing signs of financial distress. Chicago is trying to stem the bleeding with a grab bag of tax and other revenue increases but in the long term this makes the overall position worse.

    Default is Almost Inevitable as the Weak get Weaker

    The problem for Chicago and others trying to pay their debt and pension obligations by raising taxes is that this makes them unattractive destinations for businesses and workers. Growth covers many sins, as growth creates more jobs and drags more people into the area. This increases the tax base and lessens the burden from previous commitments on those already there. Well managed, low tax jurisdictions benefit from a positive feedback loop.

    For states and municipalities in decline, their best taxpayers are the first to leave when the tax burden increases. Young college educated workers with professional jobs generate substantial income and sales tax revenue but require little in the way of education and healthcare expenditure. This cohort has many options for work elsewhere and can easily relocate. Chicago and Illinois are bleeding people, with the flight of millionaires particularly detrimental on revenues.

    Those who own property are caught in a catch 22; property taxes and declining population have pushed property prices down, potentially creating negative equity. But staying means a bigger drain on the household budget as property taxes are the most efficient way to raise revenue and therefore become the tax increased the most. If too many people leave property prices plummet as they have in Detroit, making it even more difficult to collect property taxes as these are typically calculated as a percentage of the property valuation. Bankruptcy becomes inevitable as a poorer and older population base that remains simply cannot support the debt and pension obligations incurred when the population base was larger and wealthier.

    Pensions Will be Reduced, but Bondholders Will Fare Worst

    The playbook from the Detroit bankruptcy is likely to be used repeatedly in the coming decade. When a bankruptcy occurs and an administrator is appointed a very clear order of priority emerges.

    • Firstly, services must be provided otherwise voters/taxpayers will leave or revolt. There may need to be cuts to balance the budget but if there is no police force, water or waste collection the city will cease to function.
    • Secondly, pensions will be reduced to match the available assets quarantined to meet pension obligations and the ability of the budget to provide some contribution. If the budget doesn’t have capacity or the legal obligation to contribute more to pension funding, pensioners should expect their payments to be cut to something like the funding percentage. For Dallas and the pension plans in Illinois this means payments cut by more than half.
    • Third in line are financial debtors. Bondholders and lenders don’t vote and they are seen as a bunch of faceless wealthy individuals and institutions who mostly reside out of state. They effectively rank behind pensioners, who are people who predominantly reside in the state and who vote, even though the two groups technically might rank equally. This makes state and local government debt a great candidate for a CDS short as the recovery rate for unsecured debt is usually awful in the event of default.
    The Next Crisis Will Trigger an Avalanche

    At the risk of being labelled a Meredith Whitney style boy who cried wolf I expect that the next financial crisis will trigger a wholesale revaluation of the creditworthiness of US state and local government debt. I have no crystal ball for when this will happen, but it is almost certain that the next decade will contain another substantial decline in asset prices. This will impact state and local governments and their pension obligations in two major ways.

    • Firstly, asset prices will fall causing underfunded pensions to become even more obviously insolvent. Most US defined benefit pension funds are using 7.50% - 8.00% as their future return assumption. Using a 7.50% return assumption for a 60/40 stock/bond portfolio, with ten year US treasuries at 2.50%, implies equities will return 10.8% every year going forward. In a low growth, low inflation environment this might be achievable for several years, but an eventual market crash will destroy any outperformance from the good years. The continued use of such high return assumptions is unrealistic and is being used to kick the can further down the road. The largest US public pension fund, Calpers, has recognised this and is reducing its return expectations from 7.50% to 7.00% over three years. This still implies a 10% return on equities for a 60/40 portfolio.
    • Secondly, downturns cause a reassessment of all types of debt with the highest risk and most unsustainable debt unable to be renewed. State and local governments with a history of increasing indebtedness and no realistic plan for reducing their debts may become unable to borrow at any price. This will force them to seek bankruptcy or an equivalent restructuring process. Once this happens for one mainland state (Illinois looks likely to be the first) lenders will dramatically reprice the possibility that it could happen elsewhere. Those who think states cannot file for bankruptcy should watch the process occurring in Puerto Rico, it will be repeated elsewhere. Barring a federal bailout, an overly indebted state or territory has no alternative other than to default on its debts. Raising taxes or cutting services will see the city or state depopulated. Politicians and voters are strongly incentivised to default.
    Conclusion

    Chronic budget deficits, growing indebtedness, excessive pension return assumptions and pension underfunding all set the stage for a wave of state and local government pension and debt defaults in the coming decade. As Detroit has shown this century, once an area loses its competitiveness its financial viability spirals downward. As taxes increase and services are cut the wealthiest and highest income earners leave slashing government revenues and increasing the burden on the older and poorer population that remains.

    The next substantial fall in asset prices will sharpen the focus on budget deficits and pension underfunding, with the most indebted and underfunded states likely to find they are unable to rollover their debts at any price. Remaining residents will be negatively impacted, pensioners will see their payments slashed and bondholders will recover little, if any, of their debt. As there is virtually no political will to take action to avoid these problems investors should position their portfolios in expectation that these events will happen.

    http://www.zerohedge.com/news/2017-01-17/dallas-pension-fiasco-just-beginning
     
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