Portland cop pension costs to double over next 20 years
A new report by the Portland city auditor shows that the annual outlay for police and fire retirement and disability benefits, currently at about $100 million a year, is expected to climb to twice that over the next couple of decades, and isn't likely to drop back to where it is today until around 40 years from now. And by that, we're talking only about benefits for public safety officers hired before 2007; the city will continue to contribute additional dollars to fund pensions for those hired after that date, and their benefits will be smaller.
Unlike virtually all large employers in America, the city does not put any money aside in advance for pensions for police and firefighters hired before 2007. This results in a gigantic unfunded liability, which has been estimated at $2.549 billion as of July 1 of last year. (Retiree health care liabilities and underfunding of other employees' pensions push the city's overall unfunded liability to more than $3 billion.)
Since the city has to skim property taxes off the top every year to pay for pension benefits to police and firefighters, other public services will surely suffer as a result of the looming increases. That additional $100 million a year above what's being paid out now is going to have to come from somewhere. The total city budget is currently about $3.6 billion. A $100 million hit would be like a 2.8% budget cut across the board. Which services do you think will be cut -- schools and police protection, or streetcars and bioswales?
The voters of the city voted in some police and fire pension reforms in 2006, but as the new report shows, these amounted to a Band-Aid on a major wound. Police and fire pensions will be holding the city down for more than a generation.
| Posted at 7:47 AM | Permalink |
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Comments (11)
This pension is paid for by a dedicated property tax, and is fully funded through annual tax receipts. When the pension costs go up, so does the tax. So, there's really no problem here, because Portland taxpayers will willingly shell-out more and more and more each year to pay for these pensions. Won't they?
Posted by Bilbo | June 22, 2011 8:41 AM
It will be ok. Didn't you know that the population will double in 20 years? Problem solved.
Posted by other steve | June 22, 2011 9:02 AM
Remember that Randy Leonard was pushing for that "one-time" bump for PFDR a couple of years back? BWA-HA-HA
Posted by Steve | June 22, 2011 10:03 AM
If I were in charge, I would disband the Portland Development Commission, and use those sizable revenues to begin funding the disability and retirement fund.
Posted by Bad Brad | June 22, 2011 11:11 AM
Yes, "population will double in 20 years" and vehicle traffic will decrease by 50% because your refrigerator will be delivered by bike.
Posted by lw | June 22, 2011 11:20 AM
Just so long as this won't impact our ability to subsidize the Timber's "living wage" for their foodservice workers, then I don't really care what happens.
Posted by Mister Tee | June 22, 2011 12:07 PM
If I were in charge, I would disband the Portland Development Commission, . . .
Great idea.
I think we have had enough of PDC.
Just leave our city and our money alone, enough already!
Stop the "redo" - we don't need to have every part of this city transformed by whose vision here? for whose benefit?
There has been no respect for neighborhoods, and the drive for their multi, mixed use developments continues. Are our single family neighborhoods too old fashioned for the "new urban vision?"
Guess the "City of Roses" was too old of an identity and needed to be "updated!"
Are these mixed use developments (how many tax abated?)and regional centers going to pay for the pensions?
Posted by clinamen | June 22, 2011 12:48 PM
Ah, yes clinamen, if only someone would start a ballot petition initiative to disband PDC. I'd sign and I'd contribute $$ to the campaign. Something tells me a lot of readers here would.
Posted by LucsAdvo | June 22, 2011 1:08 PM
Post office suspends retirement contributions
By RANDOLPH E. SCHMID, Associated Press – 41 mins ago
http://news.yahoo.com/s/ap/20110622/ap_on_re_us/us_postal_problems
Posted by Mojo | June 22, 2011 1:31 PM
I'm all for fair treatment of public workers, but I read this article this morning in the NY Times about a unionized life guard in Laguna Beach, CA who will retire with an annual lifetime pension of 120K + at age 57. The police and fire are getting the same kind of money and retiring with 90% of their salaries. The problem with all of this is that the cuts will have to come from somewhere else because once you have made the commitment you have to keep it.
Posted by Usual Kevin | June 22, 2011 4:48 PM
Jeez and I thought that the 85% increase in the water bill (less 25% that is a direct cost for the LT2 Rule) was for the pensions and the commissioners salary increases. I believe I heard Commissioner Fritz was giving her pay increase to a charity... PWB is a part of "public workers"? The Water is still owned by the public... isn't it? If I said it this way... Couldn't The President of City Hall (Randy has a new plaque) bill the public for pensions and civil servant pay increases through the water bureau? Just a thought!
Posted by class clown | June 28, 2011 8:32 PM