2 min read
Posted on 01.31.10
  • 2 min read
  • Posted on 01.31.10

Households throughout St. Louis and the country are tightening their belts because of the bad economy. The same is true for local governments in the St. Louis region and throughout the country. Household or government, we are making hard choices.

One subject that figures prominently in City Hall's budget discussion is the public employees pension systems. Here are a few things you ought to know about the subject:

  • City taxpayers support pension systems for three different employee groups: Police Officers, Firefighters, and City Employees.

  • Pension benefits were increased in the 1990s, generally without enough calculation for future costs.

  • The City Employees pension cost went from $7 million a year early in the last decade to $61 million a year this year. (For perspective, the entire General Fund budget is $450 million.)

  • In 2000, taxpayers spent an average $43,000 to compensate each City employee. Today, taxpayers are spending $68,000 per employee, an increase of 58 percent, much of it for increased pension costs (and their cousin, health care costs).

  • In the recent past, the rising pension and health care costs have eaten up money that could have been used for raises for police officers, firefighters, and other City employees. In the coming years, these same rising pension and health care costs, if unchecked, will eat up money that could be used to keep up employment levels, maintain services, and introduce new programs.

  • City residents have already tried to help the police officers and firefighters pension systems. Voter approved a half-cent sales tax increase for police and fire pensions; and the City borrowed an additional $145 million.

  • For the past three years, the City has tried, without much success to which I can point, to engage employee groups to work together to find commonsense ways to control costs.

  • The City's $61 million a year pension cost will increase by an additional $11 million next year.

  • By law, the City cannot control the costs of the City's police and fire pensions without approval from the State of Missouri. Because of opposition from the employee groups, there has been little inclination on the part of the State to do that. Unless the law is changed or the State relents, the costs borne City residents for these systems will continue to increase without check.