Committee backs property tax increase to get city off pension debt track

Would residents be willing to pay, say, $32 more to the city in property taxes if the extra funds would place the city on track to meet its pension obligations to police and firefighter retirees and their families by 2040?

Members of the city’s Finance and Budget Committee placed that possibility on the table at their Nov. 8 meeting.

Under the proposal, which the committee plans to present to council members at their Nov. 14 meeting, the city would combine the $2 million generated by a property tax hike with money from the city’s reserve fund to come up with the $4.4 million the city’s needs to get on a 100% funding track.

The city’s current pension proposal calls for funding the pensions at a 90% rate, still more than the state minimum.

At 90%, though, the city would still be accumulating debt because of unfunded interest payments. 

At that rate, if 10% is ignored for the next 20 years, the accrued unfunded liability in the police fund, for instance, would grow to more than $87 million, said Tim Schoolmaster, president of the Police Pension Board, at the committee’s Nov. 1 meeting, held virtually.

The city’s failure to meet the state payment levels has resulted in the unfunded accrued liability shooting up from $4 million in 1972 to $126.4 million in the police fund by 2021, according to a chart Schoolmaster presented at the meeting.

Every extra dollar the city puts in now reduces the amount the city will have to fund the pensions in future years, observed one committee member at the Nov. 1 meeting.

Read More: Committee backs property tax increase to get city off pension debt track

2022-11-12 16:56:20

Notify of
Inline Feedbacks
View all comments

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More