The Case For Reform Now

Both and City and the County are debating about how to balance the budget without raising taxes. As I have shown in the past, Shelby County is much more fiscally responsible than the City of Memphis. However the County still has two fiscal warts which are shown below.

  • Pension Plan C is too expensive and has only 7-1/2 years for full vesting and allows full retirement after 25 years regardless of age.
  • Paid Time Off which is far better than the private sector (maximum of 66 paid days off per year versus 35 in the private sector. 66 days off is one quarter of the year).

The County recently showed it fiscal responsibility by preliminarily passing a pension reform plan D which corrects some of plan C’s major faults.

Now we come to the City of Memphis and their warts looks like a circus freak show.

  • Over $500 million dollars of pension fund unfunded liability.
  • Over $1.2 billion dollars of OPEB unfunded liability, nearly $1 billion more than the county.
  • Over $11 million dollars per year payments for line of duty disability versus practically nothing for the County and MLGW.
  • Huge annual payments for retiree health care premiums leading to the above OPEB unfunded liability.
  • The refusal of a working majority of the City Council to address these problems.

The Mayor has the authority to implement many needed reforms regardless of what the City Council thinks or does. I hope that he will act in time to save the tax payers. I have attached two research sheets showing the contrast between Shelby County, The City of Memphis, the MLGW and the private sector local taxpayers.

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