Instead of proposing a sales tax, why doesn’t the City cut its budget to address the issue?
The City has indeed cut its budget in order to put more money into the pension fund, but cuts alone simply will not be enough to address the issue. For the current budget year, the City cut $5.2 million in order to pay the full, recommended amount of $12.5 million; for the 2009-10 fiscal year, the recommended amount will be more than $13 million. The overall liability on the pension fund is about $198 million. The City’s General Fund – the source from which this money comes – is about $73 million,with more than 50 percent of that funding public-safety services (police and fire). Even if the City could do away with all General Fund services and personnel for two full years, it still would not be enough to cover the liability. The bottom line is the City cannot just budget cut its way to a solvent pension fund.
