City Beat: Sales tax fix pitched for pension plan

Springfield's city manager made his plea to citizens for their support of a new sales tax, which already has been endorsed by at least one of the stakeholder groups, to stabilize the Police and Fire pension fund.

City Manager Greg Burris presented his case to Springfield City Council and citizens during council's Nov. 10 meeting. His presentation is the first step toward placing the proposed sales tax on the Feb. 3 ballot.

Burris told council that the fund is underfunded by $179 million as of Sept. 30, due to a combination of less-than-adequate city contributions, changed actuarial assumptions and lackluster investment returns.

Burris' plan involves a 1-cent sales tax beginning July 1, 2009, that would run for either five years or until the plan reaches 100 percent funding, whichever comes first. The plan also calls for increased contributions to the fund by both the city and police officers and firefighters, as well as a contribution of at least $10 million from an expected court settlement with several telecommunications companies.

Burris said time is of the essence for fixing the pension fund; each day that passes increases the city's future obligation by more than $33,000.

"It has become obvious that we cannot budget cut ourselves out of this deficit," Burris said. "It's also become obvious that we can't invest our way out of this."

David Hall, a member of the pension fund board of trustees, said the board is aware of the unfortunate timing of the request for a tax increase, but the situation eliminates the alternatives.

"We recognize that it couldn't be a worse time to come forward with a proposal such as this," he said. "But the longer that this goes unresolved, the more expensive the solution will be when we ultimately pay this bill."

Tony Kelly, president of Firefighters Union Local 152, said his union already has voted to endorse the plan; the Springfield Police Officers Association was expected to vote at its Nov. 13 meeting.

Both groups also praised Burris for his willingness to tackle the issue, a sentiment echoed by Councilwoman Cindy Rushefsky.

"I have been extraordinarily impressed with Mr. Burris' ability to get a handle on this problem, and to do it quickly," she said. "He has asked the right questions, asked them of the right people, and I believe that what he has put together here is a fair, reasonable and accurate picture of the situation right now."

Not all in attendance were ready to support the proposal, however. Fred Ellison, a member of the taxpayer advocacy group Missouri Liberty Coalition, said that while he also appreciated the job Burris was doing, he feels additional safeguards must be stated clearly on the ballot to ensure the city contributes its fair share.

"Sticking our heads in the sand has not resolved the issues that have brought us to this point," he said. "But the taxpayers of Springfield should not have to put any more money into the pension plan than is absolutely required."

Council is expected to vote on the proposal at its Nov. 24 meeting, giving the city just enough time to meet the Nov. 25 deadline to get the issue on the Feb. 3 ballot.[[In-content Ad]]