Is It OK for States to Break Contracts?

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1. Teacher111 says:

   October 14, 2012 at 8:21 am

   Given how many people leave the profession, it would be smarter and more reasonable to impose changes on new employees. Yes, you won’t save as much as you would if you impose the changes on everyone, but now states are being saddled with the legal costs of the impending lawsuits for breaking the contracts.

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2. jcgrim says:

   October 14, 2012 at 8:59 am

   “House Speaker Madigan’s “let the courts decide” is a travesty of justice, a costly effrontery and negligence of a legislator’s oath of office. Though, we might expect that Ty Fahner of the Civic Committee of the Commercial Club of Chicago and other members who are practicing lawyers will represent the state “pro bono,” and most of us will know why.”

   This story caught my attention on NPR’s Planet Money in May, 2012. I am not a lawyer, but this court outcome has wide implications for public pensions.
   http://www.npr.org/blogs/money/2012/05/24/153442859/bankrupt-in-paradise

   The Northern Marianas pubic pension story might give some context to the effort of the edu-reformers to break teachers’ pension obligations and Madigan’s willingness to “let the courts decide.” A judge in the Marianas is determining the fate of public pensions for public employees on this American Protectorate. Madigan, et al may be counting on this court case to set the legal ground for breaking public pension contracts.

   The Northern Marianas pension fund is the first public pension fund in the U.S. to seek bankruptcy protection. I don’t think it will be the last. Chris Christie is running around NJ screaming about teacher’s unreasonable pensions and the state pension shortfall. They and other pension Henny Pennys fail to inform the public that governors like Christine Todd Whitman in NJ and Jeb Bush in FL borrowed money from the teacher’s pension funds to pay other debts (Bush used the money to bail out Edison Schools when they mismanaged their money running FL charter schools) and those funds have never been paid back. Hence, shortfalls.

   It’s no surprise the Marianas would be the test case to legalize a corrupt scheme to steal the livliehoods of average government workers. It’s the home of Jack Abramoff and Tom Delay and a tax shelter heaven for corporations. Someone should investigate the judge hearing this case and the REAL reason state pension funds are in shortfall. Theft, corruption, and greed by the financial industry and congress might be buried in the files.

   “Benefits were to good” is a lie being perpetrated by the tapeworms in the financial industry and edu-reformy types. In 1959, the Justice Dept indited Jimmy Hoffa for “borrowing” from the Teamsters pension. Hoffa planned to invest the money a financial scheme,that when he cashed out, he would repay the teamsters retirement fund. That used to be called fraud until the financial industry in collusion with corrupt politicians turned private corporation’s defined retirement plans over to Wall St. who sold average worker on 401K’s and IRAs -the gift that allowed corporations to funnel workers salaries into the coffers of Jimmy Hoffas in the financial industry. Then Enron bankruptcy happened-The Enron bankruptcy case permitted corporations to pay off investors instead of worker pensions. Millions of average workers lost their pensions and were left destitute.

   In the mean time all through the 1980’s and 1990’s govt officials all over the US started “borrowing” from government workers pension funds- saying they’d pay it back when financial coffers grew. 30 years of tax breaks for millionaires, billionaires, and capital gains drained state coffers and govt officials never returned those “borrowed ” funds. Sounds like fraud.- But NO. It’s those greedy police, firemen and teachers who don’t “deserve” such a pension plan.

   Wall St will crack open the last protected pensions under the guise of lazy workers getting extravagant retirements. The financial industry wants all of our money- state, federal pensions AND social security to enrich themselves. This case could give it to them.

   Sen. Murkowski told CNN in a 1998 interview after the Tom Delay & Jack Abramoff scandal in the Marianas was exposed: “The last time we heard a justification that economic advances would be jeopardized if workers were treated properly was shortly before Appomattox.”

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3. Middle school teacher says:

   October 14, 2012 at 10:16 am

   Those teaching in states that preclude teachers from participating in social security are in even more jeopardy. No pension plus no social security equals an impoverished old age.

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4. Michael Fiorillo says:

   October 14, 2012 at 10:31 am

   That’s funny: when states and localities have fiscal problems, they don’t hesitate to impose austerity, cutting needed social services, all because the contracts with bond holders are a sacred obligation, and they must receive every penny of interest coming to them.

   I guess some contracts are more sacred than others.

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   • flerper says:

     October 15, 2012 at 1:21 pm

     Yes, it is really weird how states and cities don’t just default on their bond payments to fill budget gaps. It makes no sense!

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     • Ken Previti says:

       October 15, 2012 at 2:06 pm

       There is no need to default on bond holders. Read Glen’s suggested solutions.

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5. Jane Artabasy says:

   October 14, 2012 at 10:44 am

   If private sector workers/citizens were “on our side,” none of the machinations of big money would be able to play out to the fat cats’ benefit. Our fellow denizens of the middle class have been primed by misinformation and pension envy to ask, “Why should I pay for the pensions of teachers, et al, when I don’t have one myself?” Instead, their question should be, “Why doesn’t every American worker have the right to a retirement with dignity, a roof over their head, and food on the table?” The truth is, yes, we do need income redistribution in this country, from the 1% to the 99. Since the Reagan years, wealth has been systematically redistributed from the bottom, or middle, to the top. Our tax policy (and related public pension security) has been sold to the highest bidders. It is time for an economic course correction. No one wants to be “trickled” down on!

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6. Robert Thurston says:

   October 14, 2012 at 12:07 pm

   At a pension rally a few years ago I commented to a retired history teacher that I feel like a Native American. Have any treaties stood the test of time or greed?
   How can something be considered a contract if it is coerced or imposed?
   Why are pensions and social security defined as government benefits? Can I withdraw what I put in if I don’t want the benefit?

   When will the Supreme Court realize that the new education and pension reform laws are becoming the Jim Crow laws of our time.

   Charters, private, or public —

   “Separate educational facilities are inherently unequal.” Earl Warren

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7. grinal says:

   October 14, 2012 at 3:45 pm

   My 6th Grade daughter just finished reading a realistic, historical fiction book called “Hear My Sorrow” by Deborah Hopkinson from the Scholastic diary series “Dear America.”

   This book describes the beginning of unions in NYC and the extremely poor working conditions of the early 1900s such as locked exits, no bathroom breaks, required payment for the tools necessary to do the job (sound familiar teachers???), unfair treatment based on cultural backgrounds, fines which were deducted from the paycheck for various minor infractions, and no limit to the amount of time a boss could make someone work each day. While it is a fictional account, the author attempts to use as much factual evidence as possible on which to base the actions of the heroine.

   Although she is an advanced reader, we prevented my daughter from reading this book at an earlier age because the book also describes in some detail the horrific way that 146 garment workers, most of them young immigrant girls as young as 11 years old, lept from the 8th and 9th floor windows during the Triangle Shirtwaist Factory fire in 1911.

   As a concerned teacher, my daughter has heard me discuss the many challenges that all teachers are facing in NY (and across the country) with the advent of the newest evaluation plans driven by RTTT. As a parent, I’ve discussed the stress of all the newest testing on teachers and students with her as well.

   Because I am also a NYS Retirement System Delegate, she has also heard me lament the fact that many states are looking to raid public pensions. Most recently she has also begun to wonder why the teachers in Chicago went on strike. She saw the news accounts with the thousands of people marching to support public educators and the reactions (or lack of reaction) from our government leaders.

   We have attempted to discuss these events in an appropriate way for a 6th grader to understand and at the same time allow her to make up her own mind about the direction of our great state and the entire American government in general.

   After reading the book my daughter wiped away her tears and said, “How can President Obama be letting this happen all over again? He must know what happened to these workers and how hard the first immigrants to America had to fight to help create unions to protect our rights!”

   I think my daughter just gave me my letter to President Obama on October 17th!

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   • ReTiredbutMisstheKids says:

     October 16, 2012 at 2:25 am

     Isn’t it ironic that 2012 is the hundredth anniversary of the Triangle
     Shirtwaist Factory Fire–the benchmark of the union movement–has been the year of the vilification of unions? We all saw the PBS documentary and cried, but we refuse to cry over the attempts to destroy us. We will carry on because, as the CTU has shown us, yes WE can!

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8. Ken Previti says:

   October 14, 2012 at 9:45 pm

   Please read Retirement Heist by Ellen E. Schultz and you will see how billionaire hedge fund managers make their fortunes by legally stealing from us all. (It’s legal because these managers paid to have legislation written and passed to legalize it.)
   My insightful and well informed friend, Glen Brown, adds the present public pension assault to the body of knowledge regarding the plundering of public pension systems. This is, obviously, part of the larger assault on teachers, unions and public control of public schools.
   Glen also offers solutions that are realistic, however the hedge fund billionaires and their legislative puppets stand in the way.

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