States in Dire Straits: New Debts, New Taxes, Pension Cuts

California: Hardships Mount for State Workers Facing Furloughs

September 7, 2009

WSWS - As California’s economy continues its slide, state employees are ever more acutely feeling the effects of the three-days-per-month furloughs—increased from two days per month—imposed by Governor Arnold Schwarzenegger and the Democratic-majority legislature. Confronting a 14 percent reduction in their monthly income, many who were just barely making ends meet prior to the furloughs are facing dire circumstances.

An article by Shane Goldmacher in the August 30th Los Angeles Times, entitled "State’s workers pay for furloughs program," points to the rise in car repossessions, foreclosures and bankruptcies suffered by state workers since the furloughs were imposed...

Philadelphia in Free Fall: New Debts, New Taxes, Pension Cuts

September 2, 2009

LPAC — Philadelphia Mayor Michael Nutter announced on Tuesday that the city will take out a $275 million loan from JP Morgan Chase, at 3% until Nov. 30, and 8% after that. The city is also preparing a plan to cut pensions, at the demand of the state government, in exchange for the state's permission to raise the city sales tax by 1%.

The city will delay about $150 million worth of pension payments this year, and current pension benefits will be frozen, while new workers' pensions will be cut by 20 percent. The average yearly pension for city workers is $17,350. The local CBS station notes that this is "not exactly a golden parachute."

"We've fought hard over the years for that," said Herman "Pete" Matthews, President of AFSCME District Council 33, the city's blue-collar union. "Our pension benefits are not out of line. It's something that we bargain for; it's something our members deserve."