R8ecently, Mayor Kasim Reed was asked about the city getting turned down for a federal transportation grant to expand the streetcar line.
“How many do you want me to win?” Hizzoner said, interposing first-person singular in place of the City Government of Atlanta. After all, he added, the city already snagged two large grants to fund the project.
This week, the mayor, who takes wins — and losses — very personally, stood before cameras to ballyhoo his biggest victory. It was of the fist-pumping variety, his sweeping and “historic” pension overhaul, one he sees as his defining moment and, well, I’ll let him explain. I hate to steal his joy.
“This is one of the most important pieces of pension reform, not only in Atlanta but in America,” Reed said after the state Supreme Court ruled that the city could require employees to pay in more to their pension fund without also increasing their pension benefits.
Four years ago, the City Council, under Reed’s vigorous coaxing, voted to require employees to pay 5 percent more of their pay (from 7 and 8 percent to 12 and 13 percent) so the pension fund would not go under.
Two years later, some employees sued, a move that brought forth the mayor’s muscular sense of umbrage. Reed has since refused to give firefighters or police a raise, even though other employees got a 3.5 percent bump this summer.
When in a pinch, when the tough decisions can no longer be avoided and must be made, a pol must decide to stick it either to the taxpayers or the employees. Reed noted that his buddy, Chicago’s Mayor Rahm Emanuel, another pol who loves a fight, had to push through a record-breaking property tax increase to pay for that city’s under-funded pensions. Reed went the other way, pushing the cost to the workers, although he said he’s now ready to talk about a pay raise with public safety employees. It has started, many police lieutenants got their pay bumped up this week. Sergeants are supposed to be next.
Ken Allen, president of the police department union, agrees with Reed’s “historic” description of the Supreme Court decision, although not in the same context. Employees see it as changing the rules in the middle of the game.
“I don’t know if people understand all the implications,” Allen said. “It will have a defining role in defined benefit (pension) programs across the country. It seems that there would be no ceiling as to what they can demand employees to pay.”
At least in the so-called right-to-work states, like Georgia, which dictate that bosses can pretty much do as they please. Reed has touted not raising property taxes as one of his prime accomplishments. Back in Chicago, The Rahminator was forced to raise taxes because unions there still have some clout, albeit reduced.
People here see unions as Communist cells, nor do many sympathize with cops or firefighters getting squeezed out of pensions because, well, almost nobody gets old-fashioned pensions any more. So, why should cops or firefighters be special?
Allen, who has been with the force nearly 30 years and looks to skedaddle next year, said there was an unwritten social compact between municipalities and cops. Police officers work nights and holidays, deal with violent numbskulls and take risks for paychecks that often pale compared to private sector gigs “and then you had a reward at the finish line,” Allen said. “You can then live comfortably with your families.”
But that compact has been fraying. “That trade-off seems to be decreasing every year,” he said. “People don’t want to pay you for 20 years after you leave. It’s causing this profession to diminish.”
Tony Biello, a retired police lieutenant detective and chairman of the police pension fund, says the funds have done well since 2011, although he attributes that to investment mix, not the increased contributions.
"It's not a contribution; it's a whack," he corrected. And that increased whack "devastates retention" of officers, an age-old Atlanta problem.
(Allen said at least 188 cops have left so far this year. That means by year’s end, more than 10 percent of the force, even if it approaches the hallowed 2,000 cop mark, will have left. Fire Lt. Vic Bennett, head of the firefighter’s union, said he’s been besieged by calls from comrades sure that Reed plans to do away with the pension. It seems every other public safety employee has his or her eye out for another gig elsewhere.)
Currently the police pension fund is 87 percent funded and the fire department’s 85 percent, according to pension officials. In 2011, while digging out of a recession, those funds were in the low 60 percent range. Part of the increase to the funds would be due to increased contributions, but keep in mind that the stock market increased 35 percent from June 2011 to the same time 2014, so it would seem the invisible hand of the market has as much or more to do with the rosier forecasts.
Reed’s office said 33 percent of the payroll is used to pay defined benefit plans for cops, firefighters and general employees. That’s $93 million. The employees’ portion was $34 million. Reed’s office said the adminstration will not hit workers for more contributions.
“Thirty years from now, the city will have saved more than $500 million and a pension deficit that was once projected to be over $1.5 billion will be zero,” Reed’s office said in a email. “More importantly, city employees can feel secure about the availability of the retirement funds they have earned after years of dedicated service.”
Reed, I can see, is an optimist. By 2045, he will likely be a retired silk-stocking lawyer and generations of pols, administrators and employees will have come and gone. Who knows what will be the case in 10 years? A 30-year forecast is tarot card reading.
“Pensions are a bad word, no one wants to pay into them,” said Biello. “It’s not Mayor Reed or (former Mayor) Shirley Franklin who created the unfunded pension. It was generations of mayors. They always dump it on the future.”
Human nature is like that. A problem for someone else in the future is much more palatable than a problem now for me.
But ultimately, the future catches up with everyone.
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