1 dead after LMPD officers, National Guard shot at while attempting to disperse crowd

I expect someone will respond to the previous comment by bringing up inviolable contract and the duty of the state to pay its debts. Prior court decisions make that promise subject to a lot of conditions and friendly court opinions, as the article below explains. Fixing a pension system is preferable to being told one day you're not getting your full retirement check anymore until a 5-10 year court case is decided by the Supreme Court.

https://www.clevelandfed.org/newsroom-and-events/publications/economic-commentary/2017-economic-commentaries/ec-201716-pensions-when-states-default.aspx

"Pensions as property are protected by the Takings Clause of the US Constitution, a clause which affirms that "private property [shall not] be taken for public use, without just compensation." The academic debate over the meaning of "property" and "taken" aside (Treanor, 2008), the clause has one other key term: "just compensation." As the Supreme Court noted, "[t]here can, in view of the combination of those two words, be no doubt that the compensation must be a full and perfect equivalent for the property taken."7 This judicial opinion seems to suggest that the government would always have to compensate for the impairment in pension benefits.

However, takings jurisprudence also recognizes the state's duty to protect the health, safety, and morality of state residents. Especially in a severe fiscal crisis, a state may invoke its police powers to impose "reasonable" losses on property without providing just compensation. In the case of state retiree benefits, the question of where police powers end and takings subject to just compensation begin can only be addressed after such a case is decided in court.

The final type of public pension protection is the one provided by states' constitutions, which define public pensions as contractual relationships that cannot be diminished or impaired. On the surface, this definition seems repetitive and superfluous because contracts are already protected by the state and US constitutions. So what is the point? The crucial point is in the law that applies to states when they repudiate their obligations, in contrast to the law that applies to cities and other instrumentalities of the state when they renege on their liabilities. The bankruptcy of Detroit in 2013 illustrates this distinction. In Detroit, the federal bankruptcy judge ruled that his court was not bound by the Michigan constitution's pension protection clause, effectively casting doubt on the usefulness of constitutional protections.

However, such protections may have more teeth when the obligor is a state. The reason is that the bankruptcy law, precedent, and procedure that govern city defaults are fundamentally different from the contract law, precedent, and procedure that govern state defaults. Detroit's debt restructuring is administered by the federal court under Chapter 9 of the US Bankruptcy Code. Since there is no bankruptcy procedure for states, a default or pension impairment would be first adjudicated in state courts as a contract violation. The state courts' decisions could still be challenged in federal court, and the Supreme Court could take up the issue especially if lower courts reach conflicting decisions. However, given the tendency of the Supreme Court to defer to state judgment on police-power matters in emergencies, it is plausible that a state court decision would stand. This tendency suggests that when the state creditors and retirees dispute their relative seniority in state court, retirees may be at an advantage if they have an explicit constitutional provision that clearly favors their argument.

Finally, how difficult would it be for the afflicted creditors of a state to seek justice in federal court? As it turns out, it would be very difficult. The 11th Amendment to the US Constitution prohibits the citizens of one state from suing the government of another state, and the Supreme Court has held that this "immunity principle" also bars a citizen of a state from suing that state in federal or state court.8

State Sovereignty and Creditor Protections

Given the legal precedents, it is unclear how the restructuring of state obligations would play out in court. Currently, there is no bankruptcy law similar to Chapter 9, which would clarify the creditor rights in the post-default negotiation process. Whether or not such a law would survive a 10th Amendment review (on whether Congress has the constitutional authority to enact such a law) is debated among legal scholars (Solan, 2012).

In the absence of a bankruptcy process for states, creditors may sue the state under the Contract Clause and obtain a judgment. Should creditors succeed (but recall the difficulty of obtaining such a judgment in extreme and exigent circumstances), the judgment would still be difficult to satisfy given that state assets are immune from execution. The other alternative is to apply for a writ of mandamus to order a state official to levy the necessary taxes to satisfy the creditors. However, the mandamus is available only if there already exists a law that requires the state official to levy a tax for this purpose, but he or she is refusing to do so. In other words, a state may have all the legal authority it needs to shed its insurmountable liabilities and force its creditors to accept any deal it offers.