The Pension Grand Bargain: A New Reform Model for Cities
April 26, 2016 | By Manhattan Institute |
In 2013, as Detroit’s crippling overhang of retiree pension-payment obligations hung over its bankruptcy negotiations, a daring move by a dozen major foundations broke the logjam: led by a $125 million pledge by the Ford Foundation, the philanthropic consortium collectively pledged $366 million toward the city’s pension liability, on the proviso that their contributions would leverage contributions from private corporations, state government, and public-employee unions. This paper examines whether a Detroit-style grand bargain could be successfully applied to four other midwestern cities facing the dangerous combination of significant pension costs and curtailed city services: Buffalo, Chicago, Cleveland, and St. Louis.
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