July 29, 2012

BECAUSE THAT'S WHERE THE MONEY IS:

US loves cops and firefighters -but not their pensions (Reuters, July 29, 2012)


The average annual pension for Suffolk County cops who have retired since 2007 was US$86,702 (RM274,108), according to figures from the Manhattan Institute, a public policy think tank, against US$37,270 for other county employees, excluding teachers. The county, facing a three-year deficit of US$530 million, declared a fiscal emergency in March.

Traditionally, US voters have backed generous pay and benefits for the cops and firefighters willing to risk their lives to keep citizens safe. That was especially so after the deaths of many emergency workers in the Sept. 11, 2001, attack on the World Trade Centre in New York.

But as economic conditions have worsened and many local governments have run into severe fiscal problems, that attitude has started to change. Since the 2007 recession, some cities have tried to roll back pension benefits and pay, among the most rigid and, in some cases, highest expenses in municipal budgets.

From New York to California and points in between, cops and firefighters have been drawn into pitched battles over their pay and benefits.

In San Diego and San Jose, California's second and third biggest cities, voters in June overwhelmingly backed sweeping pension reforms. In San Jose, all employees will have to choose between reduced benefits or higher retirement contributions.

In the mid-sized California cities of Stockton and San Bernardino, officials say public safety costs were among the factors that forced both to declare bankruptcy. In Vallejo, a former US Navy town near San Francisco that emerged from a three-year bankruptcy last year, public safety pay and benefits were consuming three-quarters of the city's general fund.

Detroit, plagued with one of the highest crime rates in the country, nonetheless cut pay and healthcare benefits for city workers, including police, by 10 percent just over a week ago, a move the mayor says will save the cash-strapped city US$102 million a year.

A legal challenge by the Detroit Police Officers Association failed, even as union President Joe Duncan publicly complained of what the cuts would mean for Detroit's ability to hire police, noting that the city is "already 50th on the list of pay for the biggest 50 cities in the United States."

St. Louis this month approved an overhaul of the firefighter retirement system that rolls back decades of increases, while Miami officials trying to plug a US$60 million budget gap this week declared "financial urgency," which will let them alter employee contracts. Among the city's proposals: limit overtime for firefighters and require higher health care contributions.

According to an analysis by New York-area newspaper Newsday published last month, police and sheriff's department employees in Nassau and Suffolk counties reached nearly two-thirds of each county's payroll.

"That is why a lot of municipalities are choosing bankruptcy, because it's the only way - other than getting a state control board - of getting out of these salary and pension requirements,'' said the former top official of Suffolk County, Steve Levy.
Posted by at July 29, 2012 7:22 AM
  
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