Quote:
Originally Posted by Moses
I understand the point you and Jim are making and I agree, in principle.
The issue in California is complex. A desperate governor facing recall attempted to secure critically needed support by offering California firefighters a 30% pay raise and a 90% retirement package with medical benefits. Of course the financial burden falls to the cities and counties where the firefighters work. Now several cities are considering bankruptcy because they cannot meet the enormous obligations imposed by the new retirement plan. Keep in mind, the new retirement plan only went into effect in 2006. In terms of financial impact, we are truly looking at the "tip of the iceberg".
So what would you propose? Do we honor the contract and let a few cities go bankrupt leaving firefighters with no retirement at all? Do we renegotiate the retirement package in a way to restore solvency to the cities? Do we increase taxes in California yet again to cover the shortfall?
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I seem to recall the courts not letting municipalities off the hook by means of bankruptcy: they were instructed to raise taxes (this is always interesting thing for the courts to try to mandate), reduce services (including laying off people) or sell assets under court supervision if necessary to meet their contract obligations.
The solution will likely be honoring the existing contracts, not making additional contracts of this type and raising taxes. Perhaps California should tax obesity, freeway use and the wearing of open toe shoes if one has ugly toes. Budget would be in the black quickly.
