Please also read the articles which
are highlighted within the following article – they are just a click
away…..
Bankrupted by Cushy Pension Contracts
July 15,
2011 Central Falls, Rhode Island, is not a large city. It is a town of under
20,000 people. And its government is broke, facing likely bankruptcy.
Municipal
bankruptcies are not common. But they might become so. Why? The blame is easy
to place: the proverbial gun-under-the-table contracting foisted on small localities by state
governments.
That’s what
happened in Central Falls,
anyway.
Even the New
York Times has an idea of the underlying problem:
The city,
just north of Providence, is small and poor, but
over the years it has promised police officers and firefighters
retirement benefits like those offered in big, rich states like California and New
York. These uniformed workers can retire after just
20 years of service, receive free health care in retirement, and qualify for
full disability pensions when only partly disabled.
Walter
Olson, of the Cato Institute, elaborates on this account: “‘Promised’ is a word of art here, because the city wasn’t
really making all of these concessions on a voluntary basis. . . .” The
concessions to unions were, instead, forced on the town by “public-sector
arbitration” (which has almost nothing to do with private arbitration) that has
led to a widespread “crisis in municipal finance,” which, the Times
states, has brought one in four Rhode Island municipalities to the brink.
Olson makes
the reasonable case that public-sector employee unions are a very bad idea to
begin with. The end comes either with serious reform or bankruptcy.
This is
Common Sense. I’m Paul Jacob. http://thisiscommonsense.com/?p=6483