Pensions off the table

Bob Deis: doing the right thing

City manager is proud city will honor its commitments to its employees.

Here’s a hero for our times. Bob Deis, the city manager of Stockton, California, is proud he put together a bankruptcy plan that avoids cuts in pensions promised to the city’s employees under contractual agreement.

Insurers of the city’s bonds were adamant that pensions be on the table but have now backed off accepting a deal that stretches out some payments and taking over a building that was scheduled to become the city’s city hall before the fiscal crisis hit.

Were pensions to be reduced, Deis said, “There’ll be a mass exodus of those employees and we won’t be able to fill those positions.”

There is a hitch. For the deal to work voters must approve a 3/4-cent sales tax increase in November. One-third of the revenue from the tax increase would go into the general fund. The rest will go to public safety to restore cut public safety jobs.

If the bankruptcy court approves and Stockton voters approve the sales-tax hike in November the city will follow the lead of another bankrupt California city – Vallejo – which did not cut pensions during their bankruptcy. Not honoring pension obligations during a bankruptcy proceeding is still a threat for city workers in San Bernadino and Detroit.

While we may think Bob Deis is a hero and Stockton is doing the right thing to honor contracts it signed with its employees, the uproar over this decision has been loud and ugly. The Sacramento Bee, expressed outrage on their editorial pages about the decision. Reporter Dan Walters writes: “Regardless of what happens in bankruptcy court, California’s local governments, especially cities, are facing years, or even decades, of fiscal distress from rapidly rising pension costs. Sharp increases in local pension benefits over the last 14 years, coupled with lackluster earnings by CalPERS and other pension trust funds, and a tide of baby-boomer retirements are pushing costs upward.”

It’s our guess that the Sacramento Bee has been swayed by so called “limited government, free market” propaganda outfits like Reason.com, who have come out strongly against making good on the promises to Stockton’s (and other) retirees. Check out their take on it. Make sure you scroll down on watch the YouTube video whipping up the animosity towards you and the service you provide.

Reason.com (the group used to be known as suck.com) advances the values of “free society, limited government, and free market solutions.” Drew Carey narrates several of their videos advocating for limited government and letting business do their thing.

Translation for law enforcement: they want you out of business. Their vision is that all government services will be taken over by private, profit making companies. If they win, the law enforcement profession will be staffed with security guards from Wackenhut ($1.3 billion in annual sales) or Allied Security ($515 million in annual sales).

These groups are big and they spend a lot of money lobbying and supporting friendly political candidates. According to the Bureau of Labor Statistics, in the year 2000, security guards and gaming surveillance officers hold more than 1.1 million jobs with a mean hourly wage of $9.84 and a mean annual wage of $20,460. $20,460??? Try supporting a family on that pay.