Tax hike concerns raised during Memphis pension reform discussio - wistv.com - Columbia, South Carolina

Tax hike concerns raised during Memphis pension reform discussion

Wharton is concerned if the city does not change its pension funding model, taxpayers could feel the brunt of it. Wharton is concerned if the city does not change its pension funding model, taxpayers could feel the brunt of it.

(WMC-TV) - The buzz words "tax increase" came up at Tuesday's Memphis City Council committee meeting, as city leaders hash out a deal to reform employee pensions.

The mayor says the pension system will go bust if they do not convert some employees to a 401(k). Union leaders say that is not true.

During the mayor's presentation to the council Tuesday, he said the city must cut debt somehow and the word "tax" was thrown around.

"I can't even get the stomach right now ... The thought of going to taxpayers to say, 'I want to raise your taxes,' " said Memphis Mayor A C Wharton.

Wharton is concerned if the city does not change its pension funding model, taxpayers could feel the brunt of it.

Brian Collins/City of Memphis Finance Director "Our liabilities continue to increase."

Some council members say the city actuary's report showing $709 million in unfunded liability is shameful.

"It's embarrassing. It's deplorable. We've put the whole city and people's lives at risk," said Memphis councilman Kemp Conrad.

Others say the employees should not have to take on more financial burden to fund their pensions.

The mayor's plan is to keep the current pension program for retirees and those who have worked more than 10 years. The newer employees would transition to a 401(k) retirement program.

The unions say the city is putting up a smokescreen and their actuary found a lower unfunded liability of $301 million.

"Everything this administration does is if there's a problem, they say, 'let's take it from the employees. They started with the salaries, now they're talking about pensions, and then they're looking at insurance," said Memphis Fire Association President Thomas Malone.

The city points out the State Comptroller is still breathing down their backs about Memphis' debt load.

The unions say the city caused the problem by not properly funding the pension in the first place and now they are scaring people with the recession to spend less on the workers. This discussion is far from over.

Copyright 2013 WMC-TV. All rights reserved.

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