$100 million more for indefensible costs
It’s a rare occurrence that this site links directly to an article in the daily newspaper. Today we make an exception as we link to a well researched and fact-filled report by Craig Harris regarding the unsustainably costly pensions and benefits received by employees of the City of Phoenix.
Harris writes: Phoenix residents for a second straight year will pay more than $100 million in fiscal 2012-13 to maintain the city’s ailing employee-pension system, while a task force considers whether current city employees should shoulder more of the cost.
Deputy City Manager Rick Naimark said Tuesday that the city’s financial contribution to the Phoenix Employee Retirement Plan for the fiscal year that begins July 1 will increase to $110 million, roughly $3.6 million more than the current fiscal year.
Since 2000-01, when the city paid $22.3 million to fund the pension plan, annual taxpayer-funded city contributions have increased by 377 percent, city records show. Eleven years ago, the city’s contribution to the pension plan on behalf of each employee amounted to roughly 6 percent of the employee’s income. City workers, meanwhile, contributed 5 percent of their pay.
Today, employees still set aside 5 percent of their pay for their pensions, as required by city charter. But Phoenix’s contribution to the plan on behalf of each employee now equates to roughly 18 percent of each employee’s pay, and that figure will rise to slightly more than 20 percent next fiscal year, Naimark said.
The complete report can be read here.
A pension reform panel meets today at 3:00 pm to discuss proposed pension changes for current Phoenix employees. The meeting will take place in the Phoenix City Council Chambers,200 W. Jefferson Street.
Yesterday hundreds of union supporters of Democrat mayoral candidate Greg Stanton packed the council chamber to urge council members to keep the 2 percent tax on food. Liberal Stanton resigned his council position to run for mayor but said he would have voted in support of the tax.
Republican mayoral candidate Wes Gullett has pledged fiscal accountability and to rescind the outrageous tax.
With Stanton on the council, the City of Phoenix paid $14.3 million to 6,989 employees in unconscionable “retention bonuses.” That’s $2 million more than the food tax would bring in. The fiscally conservative Americans for Prosperity has named Stanton Hero of Big Government and Champion of Big Government.