Why Was Alvin Brown's Pension Reform a Bad Deal?

[SunKing]

Is this your way of avoiding providing some documentation for your claims?

Or are you admitting that you are just talking 'theoretically'?

See my prior post.

[JFman00]

I didn't say that the Chinese system is awful, simply what it is. If you like it, good for you. I think it's done a great job given its foundations and goals (supporting economic development at all costs and resulting in the largest absolute decrease in poverty in world history) but I'm pessimistic on its long-term prospects as it's economy transitions away from the low-hanging productivity gains that come from pure physical capital investment. There's always a trade-off and it bothers me when people don't acknowledge them.

I have yet to meet a foreign minister, including the American Ambassador to China, John Huntsman that would feel comfortable saying that he knows how the 'chinese economic system' works, simply because they don't really have a single economic system or way of doing things, JFMan.  Its a complex society with a billion people and different kinds of economic zones.  While it might be useful to toss "China" into a conversation as a debate tool, its like using the bible as your reference.  There is so much there that you can find at least one scripture that taken out of context will prove anything you are trying to say, from cannibalism to incest.

A most cursory look at the statistics, from stock market capitalization, to value of loans, to number of employees to see the basis for Chinese growth. Without a doubt, a handful of different states and the SEZs have notably (but not ground-breakingly) different structures, but the numbers are quite straightforward on how much Chinese economic activity is centered on state capitalism/state-owned enterprises.

[JFman00]

Bringing the discussion back to pensions, Stockton was threatened with a lawsuit from CALPERS when it floated the idea of touching pensions, while the federal justice system seems to be behind Detroit's efforts to touch theirs.

To me the only sane solution is to shift all new hires to a defined-contribution plan, dramatically cut future benefits for existing employees based on years of service and impose a stiff but not draconian (10%?) cut on current pensions, while returning to normal funding levels. When major service cuts are necessary, millages to fund that specific service should be proposed and voted on.

There's nothing inherently desirable about 100% privatization of certain services and different communities have different expectations. I'm not saying privatization always works, or should always be tried, but that saying it never works and should never be tried is wrong.

So then, no.  There is not, nor has there ever been a successful example of a completely privatized large city or small country.

Why is that necessary to prove? The only 100% privatized example of anything would be anarchy for all intents and purposes. Not a single American entity operates without some influence or money or benefit from government.

[SunKing]

Is this your way of avoiding providing some documentation for your claims?

Or are you admitting that you are just talking 'theoretically'?

See my prior post.

Your prior post in which we are to assume that the existing pension obligations magically disappear?

Not at all in fact I have maintained that we need to honor our obligations but by transferring existing employees to private sector capitalism, yes, you stop the bleeding going forward.  And if you want proof, its not on Wikipedia, just look at the city budgets yourself.

[JFman00]

I didn't say that the Chinese system is awful, simply what it is. If you like it, good for you. I think it's done a great job given its foundations and goals (supporting economic development at all costs and resulting in the largest absolute decrease in poverty in world history) but I'm pessimistic on its long-term prospects as it's economy transitions away from the low-hanging productivity gains that come from pure physical capital investment. There's always a trade-off and it bothers me when people don't acknowledge them.

I have yet to meet a foreign minister, including the American Ambassador to China, John Huntsman that would feel comfortable saying that he knows how the 'chinese economic system' works, simply because they don't really have a single economic system or way of doing things, JFMan.  Its a complex society with a billion people and different kinds of economic zones.  While it might be useful to toss "China" into a conversation as a debate tool, its like using the bible as your reference.  There is so much there that you can find at least one scripture that taken out of context will prove anything you are trying to say, from cannibalism to incest.

A most cursory look at the statistics, from stock market capitalization, to value of loans, to number of employees to see the basis for Chinese growth. Without a doubt, a handful of different states and the SEZs have notably (but not ground-breakingly) different structures, but the numbers are quite straightforward on how much Chinese economic activity is centered on state capitalism/state-owned enterprises.

Thats very polysyllabic for reasons which aren't immediately obvious to someone listening for your answer on how Robert's suggestions are exactly like the Chinese 'system'.

Perhaps you wouldnt mind elucidating?

I don't know how else to explain it. Those are the words that publications and textbooks use to describe the kind of governmental involvement duvalprogressive was suggesting. Boeing/Airbus and the military-industrial complex are often the Western examples provided.

[SunKing]

Bringing the discussion back to pensions, Stockton was threatened with a lawsuit from CALPERS when it floated the idea of touching pensions, while the federal justice system seems to be behind Detroit's efforts to touch theirs.

To me the only sane solution is to shift all new hires to a defined-contribution plan, dramatically cut future benefits for existing employees based on years of service and impose a stiff but not draconian (10%?) cut on current pensions, while returning to normal funding levels. When major service cuts are necessary, millages to fund that specific service should be proposed and voted on.

There's nothing inherently desirable about 100% privatization of certain services and different communities have different expectations. I'm not saying privatization always works, or should always be tried, but that saying it never works and should never be tried is wrong.

So then, no.  There is not, nor has there ever been a successful example of a completely privatized large city or small country.

Why is that necessary to prove? The only 100% privatized example of anything would be anarchy for all intents and purposes. Not a single American entity operates without some influence or money or benefit from government.

Agreed, I wouldn't want to 100percent anything either.  Public sector should partner with the private not be at odds with each other.  For instance a Parks Director can be a city employee but utilize private contractors to maintain the Parks.

[SunKing]

anyone wish to congratulate me on my Full Member status?

[JFman00]

FT, the Economist, Der Spiegel, Bloomberg, WIRED. In textbooks, I think Mankiw added a section on it and I'm pretty sure Development Economics by Debraj Ray includes an involved discussion of it (haven't unpacked my books yet). If you hear urban planners on NPR talk about 3P they're talking about public-private partnerships. Just because it's jargon doesn't make it a myth.

[SunKing]

Is this your way of avoiding providing some documentation for your claims?

Or are you admitting that you are just talking 'theoretically'?

See my prior post.

Your prior post in which we are to assume that the existing pension obligations magically disappear?

Not at all in fact I have maintained that we need to honor our obligations but by transferring existing employees to private sector capitalism, yes, you stop the bleeding going forward.  And if you want proof, its not on Wikipedia, just look at the city budgets yourself.

I have.  I have a full copy of all city budgets for the past 22 years.  Most of the metrojacksonville editorial board started this publication be getting them and familiarizing ourselves with them before we started posting on the subject.

So under your radical proposal, we would keep all the old obligations and then saddle the city with a new layer of obligations and shifting contracts on top of the old ones?

Sounds brilliant.

You should publish a white paper.

So I take it that you are no longer trying to claim that Miami privatized their pensions or their public safety services?

I mean, just for the record.

Just for the record, you have a nasty habit of misquoting to make a point Mr. Dare.  I thought you were better than that.

[NotNow]

Bringing the discussion back to pensions, Stockton was threatened with a lawsuit from CALPERS when it floated the idea of touching pensions, while the federal justice system seems to be behind Detroit's efforts to touch theirs.

To me the only sane solution is to shift all new hires to a defined-contribution plan, dramatically cut future benefits for existing employees based on years of service and impose a stiff but not draconian (10%?) cut on current pensions, while returning to normal funding levels. When major service cuts are necessary, millages to fund that specific service should be proposed and voted on.

There's nothing inherently desirable about 100% privatization of certain services and different communities have different expectations. I'm not saying privatization always works, or should always be tried, but that saying it never works and should never be tried is wrong.

Placing pubic safety employees on a 401k type system would leave you with several questions.  What is your intended contribution to such a system?  How would on medical disability retirements be funded, and at what level?  At what point would public safety employees be vested? 

Jacksonville could easily fix all employee pension costs now.  All they have to do is place employees into the Florida Retirement system.  The high risk state fund is what other Florida sheriff's office uses for retirement.  It is one of the best funded systems in the nation.  The Mayor and City Council are in the state retirement.  Why won't they place the rest of city employee's in the state fund?  Why won't they at least put new employees or new public safety employees in the state retirement system?  Could it be because we are too cheap to even fund what every other county in Florida is funding?

You must not realize that current employees and current retirees are protected by contract and state law.  Any attempt to alter that contract would have to be negotiated, arbitrated, or left to the courts in the employer is claiming that it cannot meet its obligations.  Which is what the City of Jax will have to do if the current agreement ever winds up in court.  The city will then get a chance to explain why after not making required contributions, cutting property taxes for twenty years, cutting off state funding streams to the Police & Fire Pension Fund, and building a huge "reserve" fund, they now say they cannot meet their obligations.  At least we will finally get a listing of city owned real estate and other assets.

By the way, Sandy Springs did not privatize their public safety employees.

[JFman00]

Bringing the discussion back to pensions, Stockton was threatened with a lawsuit from CALPERS when it floated the idea of touching pensions, while the federal justice system seems to be behind Detroit's efforts to touch theirs.

To me the only sane solution is to shift all new hires to a defined-contribution plan, dramatically cut future benefits for existing employees based on years of service and impose a stiff but not draconian (10%?) cut on current pensions, while returning to normal funding levels. When major service cuts are necessary, millages to fund that specific service should be proposed and voted on.

There's nothing inherently desirable about 100% privatization of certain services and different communities have different expectations. I'm not saying privatization always works, or should always be tried, but that saying it never works and should never be tried is wrong.

Placing pubic safety employees on a 401k type system would leave you with several questions.  What is your intended contribution to such a system?  How would on medical disability retirements be funded, and at what level?  At what point would public safety employees be vested? 

You must not realize that current employees and current retirees are protected by contract and state law.  Any attempt to alter that contract would have to be negotiated, arbitrated, or left to the courts in the employer is claiming that it cannot meet its obligations.  Which is what the City of Jax will have to do if the current agreement ever winds up in court.  The city will then get a chance to explain why after not making required contributions, cutting property taxes for twenty years, cutting off state funding streams to the Police & Fire Pension Fund, and building a huge "reserve" fund, they now say they cannot meet their obligations.  At least we will finally get a listing of city owned real estate and other assets.

By the way, Sandy Springs did not privatize their public safety employees.

I know what I'm proposing is politically quite difficult but I don't think it's impossible. Unless you reject the idea that the city's pension system is unsustainable as it is (in which case nothing I say will have an effect), I think it's self-evident that making some painful adjustments in the short run (a combination of benefit cuts, service cuts and tax increases) is much preferred to pushing the problem down the road. From my reading of the numbers and budgets relying on just one measure would just not be doable. Just tax increases would be daunting, just service cuts would be draconian or just benefits would involve gutting.

You're definitely right that the CoJ would have to do that, and the fault of decision makers would be evident. That doesn't change the existence of the problem though. I think politicians will have a difficult time justifying higher taxes and service cuts unless, at the very least, the existing pension structure changes. As a taxpayer I'd be wary of politicians promising future changes in exchange for tax hikes/service cuts now. And as a public employee I'd be wary of accepting lower benefits in exchange for future improvements to funding. The only way it happens is with some shared sacrifice. Too often the different interests (taxpayers, unions, politicians) just play chicken on who takes the cuts first where if they all just agreed to some sacrifice they'd hurt much less in the long-run.

[SunKing]

Bringing the discussion back to pensions, Stockton was threatened with a lawsuit from CALPERS when it floated the idea of touching pensions, while the federal justice system seems to be behind Detroit's efforts to touch theirs.

To me the only sane solution is to shift all new hires to a defined-contribution plan, dramatically cut future benefits for existing employees based on years of service and impose a stiff but not draconian (10%?) cut on current pensions, while returning to normal funding levels. When major service cuts are necessary, millages to fund that specific service should be proposed and voted on.

There's nothing inherently desirable about 100% privatization of certain services and different communities have different expectations. I'm not saying privatization always works, or should always be tried, but that saying it never works and should never be tried is wrong.

Placing pubic safety employees on a 401k type system would leave you with several questions.  What is your intended contribution to such a system?  How would on medical disability retirements be funded, and at what level?  At what point would public safety employees be vested? 

You must not realize that current employees and current retirees are protected by contract and state law.  Any attempt to alter that contract would have to be negotiated, arbitrated, or left to the courts in the employer is claiming that it cannot meet its obligations.  Which is what the City of Jax will have to do if the current agreement ever winds up in court.  The city will then get a chance to explain why after not making required contributions, cutting property taxes for twenty years, cutting off state funding streams to the Police & Fire Pension Fund, and building a huge "reserve" fund, they now say they cannot meet their obligations.  At least we will finally get a listing of city owned real estate and other assets.

By the way, Sandy Springs did not privatize their public safety employees.

Ah a reasonable discussion.  But first for the THIRD TIME I AM NOT TALKING ABOUT PUBLIC SAFETY EMPLOYEES.

However other departments or even personnel within departments such as accountants, admin, code enforcement, maintenance, etc. can be privatized.

Simply put, employer side benefits continue to be funded by the City on a year to year basis.  It can be 25, 50, 100% whatever the City as employer decides, but it eliminates the unfathomable term requirement going forward.  Current retirees are protected and current employees have an opportunity to be hired by the contractor.

And you are correct on Sandy Springs, nor did they convert, general service employees.  With the exception of public safety, all general service employees have been private since incorporation.

[mtraininjax]

I say we allow Corrine Brown to tackle it, she wants to take on the Supervisor of Elections issue. Corrine, we need you to "deliver" a solution on our local mess.

[SunKing]

Bringing the discussion back to pensions, Stockton was threatened with a lawsuit from CALPERS when it floated the idea of touching pensions, while the federal justice system seems to be behind Detroit's efforts to touch theirs.

To me the only sane solution is to shift all new hires to a defined-contribution plan, dramatically cut future benefits for existing employees based on years of service and impose a stiff but not draconian (10%?) cut on current pensions, while returning to normal funding levels. When major service cuts are necessary, millages to fund that specific service should be proposed and voted on.

There's nothing inherently desirable about 100% privatization of certain services and different communities have different expectations. I'm not saying privatization always works, or should always be tried, but that saying it never works and should never be tried is wrong.

Placing pubic safety employees on a 401k type system would leave you with several questions.  What is your intended contribution to such a system?  How would on medical disability retirements be funded, and at what level?  At what point would public safety employees be vested? 

You must not realize that current employees and current retirees are protected by contract and state law.  Any attempt to alter that contract would have to be negotiated, arbitrated, or left to the courts in the employer is claiming that it cannot meet its obligations.  Which is what the City of Jax will have to do if the current agreement ever winds up in court.  The city will then get a chance to explain why after not making required contributions, cutting property taxes for twenty years, cutting off state funding streams to the Police & Fire Pension Fund, and building a huge "reserve" fund, they now say they cannot meet their obligations.  At least we will finally get a listing of city owned real estate and other assets.

By the way, Sandy Springs did not privatize their public safety employees.

Ah a reasonable discussion.  But first for the THIRD TIME I AM NOT TALKING ABOUT PUBLIC SAFETY EMPLOYEES.

However other departments or even personnel within departments such as accountants, admin, code enforcement, maintenance, etc. can be privatized.

Simply put, employer side benefits continue to be funded by the City on a year to year basis.  It can be 25, 50, 100% whatever the City as employer decides, but it eliminates the unfathomable term requirement going forward.  Current retirees are protected and current employees have an opportunity to be hired by the contractor.

And you are correct on Sandy Springs, nor did they convert, general service employees.  With the exception of public safety, all general service employees have been private since incorporation.

lol.  so now that there are questions that you cant really answer but which also dont make you look speculative and unresearched, the conversation is 'sane'?

Yes, I know.  Its crazy to ask people to back up what they say.  And having The Google around makes it so hard to at least fact check.

No you either intentionally misquoted me or simply misread what I was writing.  I'm sure you spent the night researching my point already but just in case here is a link.

http://www.governing.com/blogs/view/How-.html

It's an unbiased publication on running government services. You should read it sometime. Much more informative than Wikipedia.  Apology accepted.

[SunKing]

Now I have a real question for anybody. In all seriousness, what is City's pension obligation?  In dollars and as a percentage of its general fund budget and how does it compare with other cities?