Pension Collapse in Big D
15th December 2016
Even in Texas, the Democrats run the big cities (because that’s where all the slackers settle), with the results that you might expect.
Dallas, by contrast, has been one of the fastest-growing American cities in recent years. Becoming a magnet for investment and opportunity, however, hasn’t protected the Texas city from experiencing its own Detroit-style financial crisis. Dallas’s retirement system for cops and firefighters combines many of the features that have nearly sunk state and local pension plans around the country. Things got so dire over the summer that retirees began pulling their money out of the system. It’s the first run on a government pension plan in recent memory.
To be strictly accurate, most of that growth has not been in Dallas per se but in the surrounding suburbs, like Richardson and Plano and Frisco, which are typically run by Republicans and have a good environment for business. The City of Dallas … not so much.
Dallas created the police and fire plan in 1916. The system’s trustees eventually persuaded the state legislature to allow employees and pensioners to run the plan. Not surprisingly, the members have done so for their own benefit and sent the tab for unfunded promises—now estimated at perhaps $5 billion—to taxpayers. Among the features of the system is an annual, 4 percent cost-of-living adjustment that far exceeds the actual increase in inflation since 1989, when it was instituted. A Dallas employee with a $2,000 monthly pension in 1989 would receive $3,900 today if the system’s annual increases were pegged to the consumer price index. Under the generous Dallas formula, however, that same monthly pension could be worth more than $5,000. No wonder the ship is sinking.
As in any Democrat-run polity, the Unions elect the Government in order to gain access to the taxpayers’ money, and the Government shovels money to the Unions in order to stay in power. (Washington runs on the same method.)
December 16th, 2016 at 10:26
Houston has a similar problem. The way the Dems look at it, they promise whatever makes people keep them in office. The costs for the progams require increased taxes, which will make people unhappy, so they don’t raise taxes. Then when the bill comes due (e.g., pensions), they assume that Austin (or Washington) will step in and fix the problem, essentially moving the bill to a higher level of IOU.
Pyramid schemes are part of the Democrats’ method of operation.