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?