July 18, 2012
Increase taxes or reform the system. This is the overriding national and also local issue. Councilmen Shea Flinn and Edmund Ford Jr. proposed these possible tax increases recently to get MO MONEY for the city budget.
The taxpayers, this one included, are tired of schemes to squeeze more money out of our thin pocketbooks and wallets. We want to see real reform first, then we will consider new sources if necessary.
Here is an example of responsible action by Shelby County and kick the can down the road action by the City of Memphis.
Recently I received a copy of a 2007 Shelby County “Resolution To Provide For OPEB Benefits And Approved Changes To Health Insurance Benefits Provided To Employees and Retirees”.
This resolution was brought about by the GASB 45 standard (government accounting standards board) to make governments account for their unfunded OPEB (retiree health care costs) liability. The County’s actuaries calculated the deficit for the County OPEB fund to be $489 million as of June 30, 2006. The county’s actuaries calculated the annual required contribution would be a $36 million dollar increase over the current “pay as you go basis”.
Therefore the county did the correct thing and effective January 1, 2008, the County offered a Medicare supplemental plan for all Medicare eligible retirees rather than participation in the County’s self-insured plan. There were other changes in the retirees’ share of health insurance premiums as shown on the health care chart. As a result of these actions, the current County OPEB deficit is $257 million. Compare this to the City of Memphis OPEB deficit of $1.33 billion dollars and no reform in sight.
Oh and one other thing. The County Mayor who signed the above Resolution on June 18, 2007 was A C Wharton, Jr.