For Immediate Release
July 23, 2013
Contact:

It isn’t just Detroit: Pension Crisis From Coast to Coast

When Detroit filed Chapter 9 bankruptcy last week, Americans were once again reminded of the public pension debt that has plagued municipalities, towns and cities across the nation. A mismanaged budget coupled with a tough economy has left America’s Motor City unable to dig out from an $18 billion hole, with nearly four billion of that promised to public employees in the retiree health and pension commitments.

But, guess what? It isn’t just Detroit; ballooning debt – driven largely by ballooning retiree pension and health benefits, in some cases fueled by fiscal mismanagement - have led cities and municipalities to file for bankruptcy from coast-to-coast.

U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, has a plan to help fend off this public pension crisis to ensure that taxpayers aren’t left holding the bag, while ensuring that workers get what’s promised to them.  

Here’s a look at a list of U.S. cities, towns and counties that have filed bankruptcy over the last five years:

1.    July 2013: Detroit, Michigan
“Detroit's road to financial ruin started decades ago with city leaders agreeing to generous pension benefits, which were managed by boards with overly optimistic projections for investment gains.” (“Detroit Bankruptcy Likely to Spark a Pension Brawl,” Wall Street Journal, 07/19/2013)

2.    August 2012: San Bernardino, California
“The city faced insolvency because of accounting errors, deficit spending, pension and debt costs, and lack of revenue growth, according to the June 26 report.”  (“San Bernardino, California, Files Chapter 9 Bankruptcy,” Bloomberg, 08/02/2012)

3.    July 2012: Mammoth Lakes, California
“…there was a lack of sufficient revenue to pay its current and anticipated obligations, as evidenced by a $2.7 million initial shortfall in its 2011-2012 fiscal year budget,” (“It's official: Mammoth to declare bankruptcy; Wood: 'A necessary and unavoidable step',” Mammoth Times, July 2, 2012)

4.    June 2012: Stockton, California
“The California Public Employees' Retirement System, which manages Stockton's pension plan, tops the list. The retirement system has a $147.5 million claim for unfunded pension costs.” (“Stockton, California files for bankruptcy,” Reuters, 06/28/2012)

5.    November 2011: Jefferson County, Alabama
“The county, which includes the city of Birmingham, is drowning under $4 billion in debt.” (“In Alabama, a County That Fell Off the Financial Cliff,” New York Times, 02/18/12)

6.    October 2011: Harrisburg, Pennsylvania
“For years, Harrisburg has been struggling under a heavy debt burden,…” (“Harrisburg, Pennsylvania’s capital, files for bankruptcy,” Washington Post, 10/12/2011)

7.    March 2011: Boise County, Idaho
“….falling tax revenue, rising spending, unfunded pension obligations …that have raised concern about city and county finances nationwide.” (“Small Idaho County Files for Bankruptcy.” Wall Street Journal, 03/03/2011)

8.    August 2011: Central Falls, Rhode Island
“…blamed the city's pension liabilities in particular for its financial failure, as well as past leaders' decisions to approve "unaffordable" compensation for unionized workers.” (“Central Falls files for bankruptcy,” WPRI Channel 12, Rhode Island, 8/01/2011)

9.    October 2009: Prichard, Alabama
“For many years, the city — like many other cities and states today — knew that its pension plan was underfunded.  …2004, the city hired actuary, reported “the [pension] plan is projected to exhaust the assets around 2009,” (“Alabama Town’s Failed Pension Is a Warning,” New York Times, 12/10/2010)

10.    May 2008: Vallejo, California
“The final budget-crusher was the city's pension plan.” (“Fat pensions spell doom for many cities,” CNNMoney, 06/03/08)


###