Why not a ¼ cent or ½ cent sales tax instead of 1 cent?
The Pension Board looked at all of these rates, taking into account a variety of investment return rates and scenarios. The Board very carefully evaluated these and concluded that the plan must be at least 90 percent funded to be self-sustaining. It found that less than a ½-cent sales tax will not ensure 90 percent funding. The 1 percent sales tax level was the least sensitive to poor market returns and took the least amount of time to roll the tax back. The Board’s actuary recommended a large infusion of funds as quickly as possible for the highest probability of success in restoring a healthy funded ratio.
