It'll come as scant consolation to pensioners braced to see retirement benefits shrink, but the situation causing their nightmare isn't a Detroit-only phenomenon.
This "is far from the only city being crushed by a roiling mountain of long-term debt," Todd Spangler reports from the Free Press' Washington bureau.
He quotes state Treasurer Andy Dillon: “We’re just at the front of the line here.”
From Baltimore to Los Angeles, and many points in between, municipalities are increasingly confronted with how to pay for these massive promises. The Pew Center for the States, in Washington, estimated states’ public pension plans across the U.S. were underfunded by a whopping $1.4 trillion in 2010. . . .
Chicago recently saw its credit rating downgraded because of a $19-billion unfunded pension liability that the ratings service Moody’s puts closer to $36 billion. And Los Angeles could be facing a liability of more than $30 billion, by some estimates. . . .
Early this year, the Pew Center released a survey showing that 61 of the nation’s largest cities — limiting the survey to the largest city in each state and all other cities with more than 500,000 people — had a gap of more than $217 billion in unfunded pension and health care liabilities. While cities had long promised health care, life insurance and other benefits to retirees, “few ... started saving to cover the long-term costs,” the report said.
