City Journal Summer 2014

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Summer 2014
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Steven Greenhut
San Bernardino Surrenders « Back to Story

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Even that old Lefty FDR knew the dangers of public employee unions.

Unions want big salaries and big benefits, which the politicians can deliver.

Politicians want big campaign contributions and votes, which the unions can deliver.

The politicians are supposed to represent the people, but the money and votes that public unions provide is too much temptation for them to resist.

The only incentive they have to keep the unions from raiding the treasury is a large, engaged, vocal, informed, and alert constituency of voters willing to hold their feet to the fire. When's the last time that's happened?

With the mainstream press, whether through ideology or ignorance, derelict in its duty to inform voters, and voters too ignorant, uninformed, distracted or lazy to worry about it, politicians have had every opportunity to benefit from public union resources and no reason to worry about consequences. They're not paying the bills, we are.

California politicians and public employee unions are two lions eating a deer, and there isn't a lot of meat left on the carcass.
Look many retired sheriffs in San Bernardino county are only bringing in $200,000.00 annually, how are they supposed to pay for there boats, vacation homes, casino money, golf outings etc. luckily there health care is paid for other wise they might have to stay home a day or two and miss vacationing 365 days a year. Remember they did all this for us!
Cities should not make promises they can't keep. Workers, especially those nearing retirement, are in a far more vulnerable situation than other creditors, and pension and wage promises MUST be honoured. Otherwise, municipalities are no better than common business cheats, and their officials should be jailed.
The CCCP destroyed itself with non market forces by defining wages and production. As I've commented on theses pages USA will destroy itself by judicial judgments and vested companies against “we the people” interests.
This is great, stolen taxpayer money up for grabs, how about a vote, nah, why not just steal the taxes for ourselves, we might lose a vote! In case you don't know, cops and sheriffs, firefighters pay only 10% of what's put in their pension, so if they get 50 grand annually in their pension fund they only put in 5 grand of it. This is unapproved stolen tax dollars approved by the biggest tax cheats on earth, the public sector! Don't by lottery tickets just get a job in the public sector, there all Lottery winners!!
Cool I was worried about my sheriff dad, his retirement check of 200k a year was in question, now he can continue making my house and car payment, he deserves this much , he worked for 28 years, four days a week! Go dad!
John Tyler, the income of a grantor trust is taxed to the grantor, so no income tax saving there. The income of a non-grantor trust, like the kind set up in estates, is taxed at 39.6% when its income reaches $12,000, so there is precious little income tax saving there, either. This is why non-grantor trusts typically pay their income to their beneficiaries, who are taxed at their own rate. Trusts can save on estate taxes, but you are speaking of income tax. Since you claim that Mr. Stewart uses trusts "to shelter his income", would you please explain how his trusts do that?
TO: Howard'S June 28, 2014 at 9:43 AM comment below.
No, the multimillionaire Hollywood libs will NOT be paying 50% of their income in taxes.
You see their income levels allow them to set up trust funds and hire the best tax accountants and tax lawyers to avoid paying the taxes that Babs et. al., support.
For instance, the late night talk show host, John Stewart, a multimillionaire has THREE TRUST FUNDS, each named after one of his pets, to shelter his income.

Michael W. Perry June 28, 2014 at 4:53 PM
Quote: "For nominally solvent cities, state courts have consistently upheld the “California Rule,” which holds that once a city council grants a pension increase—even one based on absurdly optimistic or dishonest promises—the full pension must be paid."

Perhaps that needs to be replaced with the Union Rule, which states that in cases where there is collective bargaining through a union, any unrealistic pensions does NOT have to be paid. The rationale is that, while individual workers may not have an ability to afford the expertise to determine if a plan is realistic, a union does. By delegating their negotiations to a union, workers have become responsible for those unrealistic plans.

The Union Rule does not apply when there's no collective bargaining since it can be assumed that individual employees, acting on their own, lack the skill to evaluate a pension plan.

I'm beginning to think that corporations should do everything they can to shelter their income from taxes in offshore accounts because that money will only go to public pensions.
So ultimately the "answer" will be much higher taxes. The state will subsidize the towns to cover the shortfall. And ultimately Obama and Yellen will print money to reimburse their friendly liberal government in California.

Liberal saps like Babs Streisand and her band of liberals will gladly pay well north of 50% of their income to support overpaid firemen and costly retiree pensions. All in all, a good days work for the left.
The next step is to disincorporate.

http://www.boomcalifornia.com/2014/01/riverside-county-disincorporated/

The legislature is raiding tax revenues that cities depended on. The pension mess is not the only one.
CA CHING, CA CHING, CA CHING! YEAH, IT MUST BE THAT TIME OF YEAR AGAIN!
My Union Boss down at the Town Hall emailed me yesterday and.
Told me that this article was hitting the Papers today, and He told Me.
to make it Look like I was Working till this Blows Over in a week. I
know the routine! In a week, I'll be back to my usual activity of.
Collecting A Paycheck for Doing Nothing! Hey, Private Sector.
Workers; You really gotta Pony Up more Taxes! I need at least a 10 %.
raise! My Cabin Cruiser at the Dock behind my Vacation House in.
Florida needs a New Engine. My wife has been after me for a new car.
She wants a BMW X6 G-Power Typhoon S! I told her I can't afford that.
car. So then she says she will accept a Mercedes-Benz CL-Class and.
Nothing else! I also got Private School Tuition of $ 40,000.00 due.
in September. I got Credit Card Expenses coming out my AXX! That
new 3000 sq ft extension on my house raised my property taxes $ 15,000.
The maid and the housekeeper want raises. The gardener also wants a.
raise. You see Bunky; It ain't easy in the Public Sector! So come
on Private Sector Worker; Pony Up and Pay More Taxes so I can afford to.
live here! You See; Life Is Not Fair, and the DemoRats will take.
care of Everything! HAPPY DAYS ARE HERE AGAIN!
And, John Gardner, before long there won't be any money there, either.
Quoting ..."When taxpayers are on the hook for the pension payments, CalPERS optimistically predicts a 7.5 percent rate of return. When its own money is at stake, the pension fund assumes a much lower rate. "

Sure, THAT works when YOU have no skin in the game, and have placed an uninvolved 3-rd party (the Taxpayers) on the hood for shortfalls. Can you picture the smile on a Private Sector investor's face if he had privy to such investment deals ?
It seems the only way to get out of the "going forward" contracts is to outsource the service. But try that, and the CA state legislature will ban that option, even though most cities contract out at least part of their functions.

It's hard to contract out police, but firefighting CAN be contracted out. At these outlandish ff salaries, there's LOTS of room for a private company to come in, take it over, pay half the wages (or less -- reflecting market prices), increase service and make a profit.

IF the voters and the state legislature will allow it. Iffy.
Make that "benefits for future service can be reduced". :)
I simply do not comprehend how any court could disagree with the idea that benefits for future service cannot be reduced --- there are simply no vested rights there.