This is a bumper sticker that should be on every taxpayer’s car in America. The national bill is near $16 trillion dollars. But look at the local situation on unfunded liabilities.
Unfunded liabilities are political promises that politicians have made that will probably come due after they are out of office and retired on a pension and health care plan not available to the ordinary taxpayer.
| Unfunded pension liability | Unfunded OPEB (health care) liability | |
| Memphis | 531,004,000 | 1,335,058,000 |
| Shelby County | 120,382,000 | 261,362,000 |
| MLGW | 213,196,991 | 466,000,000 |
| Memphis City Schools | See Note 1 | 1,169,082,486 |
| Shelby County Schools | See Note 1 | 242,220,410 |
| Totals | 864,582,991 | 3,473,722,896 |
| Grand Total Unfunded Pension and OPEB Liabilities, $4,338,305,887 |
Note 1: For the Memphis City Schools and Shelby County Schools, teachers and most other employees are required to be in Social Security and are part of the Tennessee Consolidated Retirement System. They have to pay whatever the TCRS requires them to pay to the TCRS system. Their retirement pay is part social security and part defined benefit. The TCRS has an unfunded liability as of 2009 of $3.559 billion dollars.
Most of these systems assume a 7.5% to 8% annual return on their funds. What happens if the return is 5.5% rather than 7.5%? A ½% sales tax increase would generate about $50 million per year. How much would be needed to cover the above unfunded liability? It is past time that we reform public pensions and health care benefits as the debt clock ticks towards the fiscal cliff.
So, if you combine all local source revenues for Memphis and Shelby County per year, how many years of total revenue would you have to contribute to bring our unfunded liabilities to zero?