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Are politicians conflating cash problems with pension problems?

Are politicians conflating cash problems with pension problems?.

Virtually every city in America is struggling with its pension obligations. It turns out that a massive downtown in the stock market, even temporary, can really damage the value of an investment portfolio. While much needs to be done in terms of improving and stabilizing these programs, some financial advisers are cautioning not to blame municipal budget issues entirely on legacy costs. More from Detroit News:

Turbeville’s report blames Detroit’s population loss in the last census for triggering a $24 million reduction in constitutional state revenue sharing. The Legislature cut Detroit’s annual statutory revenue sharing by an additional $42.8 million. The cuts account for a third of the city’s revenue losses between the 2011 and 2013 fiscal years, Turbeville said.

“By cutting revenue sharing with the city, the state effectively reduced its own budget challenges on the backs of the taxpayers of Detroit (and other cities),” Turbeville wrote in the report. “Furthermore, the Legislature placed strict limits on the city’s ability to raise revenue itself to offset these losses.”

Sound familiar Cincinnati?

By Randy A. Simes

Randy is an award-winning urban planner who founded UrbanCincy in May 2007. He grew up on Cincinnati’s west side in Covedale, and graduated from the University of Cincinnati’s nationally acclaimed School of Planning in June 2009. In addition to maintaining ownership and serving as the managing editor for UrbanCincy, Randy has worked professionally as a planning consultant throughout the United States, Korea and the Middle East. After brief stints in Atlanta and Chicago, he currently lives in the Daechi neighborhood of Seoul’s Gangnam district.