Pensions Next Target For Cutbacks?

Courthouse workers and other public employees should take notice of a Detroit judge’s ruling that public employee pensions are just contracts, not really guarantees at all. If that ruling is upheld on appeal, it means that funds like the California Public Employee Pension System are not as protected as many thought. In effect, the judge is saying that federal laws trump state assurances.
 
The Press-Democrat newspaper in Sonoma County is among those offering analysis of the decision, writing in an editorial that “… to cover soaring retirement costs, which in some places are approaching 50 cents on every payroll dollar, cities and counties in California and across the country have laid off workers and slashed spending on parks, street maintenance and other public services. A handful have filed under Chapter 9 of the federal bankruptcy code; others are weighing the possibility”
 
You already see pensions at issue in the high-profile San Bernardino bankruptcy debate. You also hear whispers that, should public employee pensions be questioned, the issue could be real leverage in the next round of budget negotiations. Read the Press-Democrat editorial, which outlines the issue pretty well, here.