Harrisburg, PA here we come!!

The only question is when I need to find a new address er home.

Jack, when will the crows come calling for payouts on that debt that the city cannot make? Timetable?

You think they care at all? This is stuff that will happen after they are gone and then we'll get the "You Promised" refrain from the beneficiaries.

For them, it's about getting as much cash now as they can to pay for the pet projects.

So what happens when the check comes and the state cant pay? I dont know enough about public finances to understand what will happen then.

Some cities will go into bankruptcy to get rid of some of their pension liabilities. It's not 100% certain that Portland legally could or actually would do that, but it's certainly a possibility.

Seems like a big problem when a city cant shed the debt via bankruptcy, but also cant pay the bill. This is what doesnt make sense to me. Something obviously has to give.

Here's one scenario for how it could unfold:

1. Spending on operating budgets will be slashed to the bone: imagine half the police officers and firefighters getting a pink slip.

2. Parks and community centers will be closed or maintained by volunteers.

3. The fleet of hybrid and/or biodiesel vehicles will be auctioned.

4. Everything that can be taxed, permitted, or made fee-based (like 911 response), will be. Expect "private utilities" (PGE, NW Natural, Comcast) to increase their pass-thru taxes as well.

The city will become more expensive, less livable, and emergency response times will grow. Crime rates will increase, and roads/sewers/water lines will be even more neglected than they are currently.

"Here's one scenario for how it could unfold"

Realize benes are topline expenses (ie they get paid before anything.) Which explains why when Ted gave a 20% bump in education spending in '07 it all went for benefits just like 80% of last years stimulus monies.

So, you're right, they start cutting customer service stuff first and benes last. The only thing that will save it (barring some sudden increase in IQ of govt mgmt) is probably funds from the printing press we call the Federal govt.

Mister Tee is close to the mark. These pensions won't all be paid at once. They phase in as people retire.

So it's like the water slowly heating up around the frog.

What that means for us, is the pensions currently being paid out become a larger and larger portion of the overall annual bill. On-going operating costs must be cut to make way for this larger and larger share.

Same on the Fed level. Most of our taxes will be going to Soc Security and Medicare and the budget for everything else will deteriorate for the foreseeable future.

Baby boomers have screwed us coming and going. Borrowed in order to spend whatever they wanted while young, suck up every dime of tax money from younger generations in their retirement. (Sorry boomers, but it's true.)

Not so fast Snards. We "Boomers" are fighting like hell to keep Leonard, PWB, and the EPA from writing a +$1 Billion check to destroy Bull Run water system. Think water bills are high now? Just wait a year or two.... unless you tell them NOW we don't need to fix a public health problem that does not exist. We're getting snookered...big time.

I blieve the city council can raise our taxes to cover police an fire retirement without a voye by residents. Am I wrong?

"I blieve the city council can raise our taxes to cover police an fire retirement without a voye by residents."

It'd have to be some kind of fee (tied to a pay for service like water.) Otherwise, they have to do something like Randy's solution last year - Vote on a 30 year property tax increase for PFDR.

I believe the city council can raise our taxes to cover police and fire retirement without a vote by residents.

FPD&R -- the largest source of the liability -- is funded by a separate property tax assessment. Most local governments have fixed tax rates due to Measure 50; however, the FPD&R rate is variable. It goes up to whatever it needs to in order to fund the FPD&R program.

The FPD&R levy is, however, included in the $10 per $1,000 of RMV cap, also a part of Measure 50. So to the extent the FPD&R levy goes up and pushes a property above the $10 limit, all those taxes get compressed. In other words, for properties in compression, as FPD&R goes up to pay for benefits, the City, County, and schools collect less to pay for services.

I think the term "unfunded" is a bit of a misnomer. It's funded all right -- by every property owner in Portland.

Sold the house in close in NE Portland last year b/c I wanted to cash out the remaining equity. It doesn't take a economist to read the tea leaves and see the hurt that is coming to our nation and especially our state. PERS and the PDX Police/Fire pensions, like most govt programs are unsustainable. The state needs to default on the overly generous pensions and transfer them to the PBGC.
I am very happily renting about a block away from my old house. It will be best to be mobile in the coming days. If the taxes/fees/fines/assessments get too oppressive it is time to move on.

It's funded all right -- by every property owner in Portland.

A mere promise or obligation to pay is not funding. If property owners can't pay, they don't.

Funded vs. Unfunded doesn't mean authorized vs. unauthorized.

A defined benefit obligation increases for each year of employment. A "funded" pension plan sets aside enough money for each employee IN ADVANCE so that it can be "safely" invested to allow the pension fund to grow above the rate of inflation and meet actuarial projections of how much will be required to meet all future payments. When you don't set aside funds every year, you have no opportunity to invest those funds and you lose out on compound rates of return on even the safest investments (like U.S. Treasury Bonds)

To pay for all those retirees/spouses out of annual property tax collections requires that property tax collections grow at/above the rate of inflation plus the rate at which recipients retire. More recipients retiring earlier/living longer puts a burden on property tax collections, especially if we see a net decrease in population. Say, for example, a bunch of wealthy retirees decided to move to Vancouver and/or the suburbs to reduce their tax burden. That could really reduce property values and (eventually) property tax collections.

Snards - get a grip on reality. Boomers have screwed no one. The feds have been skimming the interest off Soc. Sec. for years to pay for other things like wars and pork barrel projects to enrich or benefit this group or that. Others and I have posted numerous links documenting that. Please actually learn something today.

I've been paying into Soc Security since 1970. If all the money that I have paid in over time had been invested privately, I could be retired by now and not looking towards 10 more years before I have eligibility.

Meawhile, I put 20% down on my first house back when. And my averaged interest rate on the 3 mortages (complicated deal with 2 assumptions and a owner loan) was over 14%. It was the Gen Xers that were putting squat down on overpriced houses and paying miniscule interest rates. Boomers never thought we were entitled to home ownership. Entitlement is the hallmark of Gen Xers.

And I won't be getting any pensions. I have been paying into a 401K and have an old IRA from when a certain bank did not allow most employees with under x number of years tenure to participate in their retirement plan (the law no longer countenances that particular behavior).

Most of my Boomer friends are pretty much like me in their experiences.

Check out how much the average policeman is going to pull in pension funds over the 50 years of his retirement at age 55, it is obscene.

Being a cop for 35 years should not entitle you to a better retirement than most engineers.