Atlanta faces a fiscal crisis caused by decisions made in 2001, 2005 and 2009.
But the Atlanta City Council has the power to change course now — by voting for pension reform by June 30 to ensure financial stability in the city. The time has come for action, not excuses about needing more time to study the issue.
For the past 18 months, my administration has analyzed the city’s $1.5 billion unfunded pension liability and its impact on the city’s fiscal health today and in the future. We have discussed those findings publicly dozens of times with council members, employees, union reps and the media.
Atlanta’s pension cost per dollar of salary is higher than the top 20 largest cities in the nation. The pension plan is only 63 percent funded. And it has been costing the city more over time, consuming $110 million of the $545 million proposed fiscal 2012 budget.
If the council fails to enact pension reform now, employees will lose jobs, services will be cut and the unfunded liability will continue to worsen. Yet, the council president and some members insist they need to “stay the course” and move with “deliberate speed.”
The city’s pension crisis is not new. Concerned taxpayer organizations and the local media have documented the decisions made over the past decade — notably all in election years — that led to the current situation. That’s why I pledged to address pensions as a candidate for mayor, and why I began doing so within weeks of taking office.
My administration has introduced two reform proposals that protect retirees, address employee concerns and achieve significant savings for the city. Council Finance Executive Chairwoman Yolanda Adrean introduced an alternative that would move all new employees into Social Security and a 401(k)-type plan. Current workers would retain their traditional pension at a reduced multiplier and also participate in a 401(k)-type plan.
Her proposal achieves my goal of saving the city millions of dollars while also providing employees security about their retirement. If approved by council this month, the plan would save $15 million this year and over $20 million annually in the future.
It would eliminate the need for layoffs, allow our city’s parks to be better maintained and sanitation services to continue at current levels. Most important, it would begin paying down Atlanta’s $1.5 billion unfunded pension liability and avoid it spiraling.
Voters elect officials to make hard decisions. The City Council should enact pension reform by June 30th. Too much damage has already been done to the city of Atlanta to wait.
Kasim Reed is Atlanta’s mayor.
About the Author
Credit: Bob Andres, email@example.com