Pension tax passes; next step: fill police, fire positions

With the Nov. 3 passage of a sales tax for the Police and Fire Pension Fund, Springfield residents gave the city's budget an estimated $28 million annual shot in the arm for five years.

The O-cent sales tax, which passed with 54.6 percent of the vote, will bolster the pension fund, currently underfunded by more than $200 million. This was the second time this year that the city attempted to pass a sales tax for the pension fund; a 1-cent tax failed at the polls in February.

More than 23,700 people voted on the issue, an increase of about 4,500 from the February vote, and Mayor Jim O'Neal noted that about three-quarters of that increase was in favor of the tax.

Springfield City Council now will implement a list of seven proposals it approved in September to offer additional support to the fund, including increasing city contribution levels to 35 percent from 28.88 percent of payroll, increasing police and fire employee contributions to 13.35 percent from 11.35 percent; and closing the plan to new hires, putting them instead into the statewide Local Government Employees Retirement System.

The city will begin collecting the tax in April and will receive the first revenue from it in June, meaning the new tax will have little impact on the 2010 fiscal year that ends in June.

And while all the additional money collected will go directly into the pension fund, the tax frees up an estimated $3 million to $4 million that was spent on city pension contributions for use in other areas. The city has for the last two years contributed more than 50 percent of payroll to the fund in an effort to boost the sagging total. Actuarial estimates said the city's recommended contribution could have reached 63 percent in fiscal 2011 had the tax failed.

The day after the vote, both O'Neal and City Manager Greg Burris stressed that the most pressing need is boosting manpower in the Police and Fire departments, which have 31 and 18 open positions, respectively.

"I've asked council to fast-track action on one piece of (the fiscal 2011) budget: hiring back a number of police officers and firefighters so that the academies can be ready to open right when the fiscal year begins," O'Neal said.

Burris noted that if the Police and Fire academies can open in July, new firefighters could be on the street by 2011, with new Police officers on the street after 40 weeks.

Officials also addressed spending concerns with the new revenue. O'Neal pointed to the recently approved citizen tax oversight committee, which will watch the spending and management of city sales tax revenues.

"The people have entrusted us with $100 million, and they expect it to go to the right place and be managed by the right people," said Jerry Fenstermaker, who was chairman of the citizen-run Police and Fire Pension Task Force.

Burris added that once the city adds police officers and firefighters, there likely will not be much additional revenue for rolling back current budget cuts such as the hiring freeze on 155 city jobs.That is especially true, he added, if sales tax performance continues to lag as it has for the first quarter of fiscal 2010.

Through October, general sales tax revenue is down 11 percent.

O'Neal said that the vocal opponents of the tax increase will not be ignored now that the tax has passed.

"As we look at the empty positions in city government ... this is an opportunity for us to review those and ... to re-engineer city government in some fashion," he said. "To everyone who voted 'yes' on this tax issue, we will work hard to keep your trust, and if you voted 'no,' we're going to work doubly hard to earn your trust."