Residents of Hollywood Florida have had enough of exorbitant police, fire and city workers. In a referendum pitting a 23% tax increase against public union benefits, voters made the smart choice.

The turnout was small, but that should have favored the unions because every one of them probably voted to keep the gravy pain and screw everyone else.

Please consider the Miami Herald article, Hollywood voters: Cut the pensions

With a low voter turnout — about 13 percent of the city’s 84,521 registered voters — residents cast ballots to strip police, firefighters and the city’s general employees of their current pension plans, allowing the city to save $8.5 million.

Facing a $38 million deficit and unable to come to an agreement with the city’s unions, Hollywood leaders took the risky move of putting the issue to a public referendum. Last year, the city said it had to put $36.6 million into the underfunded pension program.

Several cities throughout South Florida are also struggling with sharply increased pension costs, and have been eyeing the Hollywood case to see how it turned out.

“It could be a harbinger,’’ said Stephen Cypen, an attorney who represents more than a dozen South Florida municipal pension funds, including Hollywood’s.

Referendums carry a special significance because voters are getting the chance to weigh in, he said, adding that Tuesday’s “yes’’ vote could have implications for other cities.

Coral Gables, Miami, Pembroke Pines and Miami Beach have also been struggling with rising pension costs.

But not all cities need to hold a referendum; in Hollywood’s case, the city charter requires a citywide vote when the unions and city officials can not come to an agreement.

Union leaders said Tuesday night they will challenge the election in court.

“They went about this wrong way,” said Firefighter Union President Dan Martinez. “They completely superseded our right to collectively bargain.”

Inherent Wrongs

Voters went about this the right way.

There is no “inherent right” for public union collective bargaining. Indeed, public union collective bargaining is an “inherent wrong” on two counts.

(1) It is tantamount to slavery (Please see Paul Krugman, Stephen Colbert, Bill Maher, others, Ignore Extortion, Bribery, Coercion, and Slavery; No One Should Own You!).

(2) No one speaks up for the taxpayer.

Taxpayers made the only reasonable choice.

The changes mean fire, police and general employees will have to work longer in order to retire, will receive a smaller percentage of their salary as pension and will no longer be able to include vacation and cost of living increases into the formula.

For firefighter Bill Huddleston, who has been with the Hollywood fire department for 22 years, the yes vote is “devastating.” Huddleston, 46, began working at age 24 and has been on the force for 22 years. He would be eligible to retire in a few months.

“This city will be changed forever,” Huddleston said.

Change for the Better

Huddleston moans the “This city will be changed forever.”

Mish says “It’s about time. The change will be for the better”. It is nonsensical for someone to be able to retire at age 46. The sense of entitlement of so-called public servants is galling. It’s no wonder Hollywood is broke.

Public unions have broken the backs of nearly every city in the country.

Taxpayers Still Stiffed

If voters had struck down the pension changes, the city was preparing to lay off 75 employees and consider raising the tax rate by 23 percent. Instead, the city will likely stick with an 11 percent tax increase.

Note how taxpayers are still paying through the nose with a “mere” 11 percent tax increase.

A better option may have been bankruptcy, hoping to void police and firefighter contracts altogether.

Cause for Celebration

“It’s not a victory and not a cause for a celebration,” said Mayor Peter Bober. “It’s properly viewed as taking an important step toward changing the way we do business in Hollywood.”

Mayor, please be serious. Of course it’s a cause for celebration. However, it’s only a start.

One might argue that national right-to-work laws, the scrapping of Davis-Bacon and all prevailing wage laws, and the end to mandated collective bargaining especially for public union workers would set the country in the right direction and be cause for a “grand celebration.”

One-by-one, city-by-city will come to that conclusion even if Congress fails to address the issues. Cities are broke, and there is no other choice.

Unfortunately president Obama apparently still wants to head the country in exactly the wrong direction with “card check” rules and other hopeless ideas.

About the author: Mike “Mish” Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management. His top-rated global economics blog Mish’s Global Economic Trend Analysis offers insightful commentary every day of the week. He is also a contributing “professor” on Minyanville, a community site focused on economic and financial education. Every Thursday he does a podcast on HoweStreet and on an ad hoc basis he contributes to many other websites, including UnionWatch.

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