The City of Phoenix has been living beyond their means for way too long. Their fiscal irresponsibility has led to a crushing $5.7 Billion in unfunded pension debt and no real plan on how to pay it off or honor their commitments to current or future retirees.
The City of Phoenix Employees’ Retirement System (COPERS), the retirement plan for general employees excluding sworn police and fire personnel, is woefully underfunded. The City contributed less than $30M a year to COPERS in the early 2000’s; this is expected to balloon to over $180M by next year. Yet these payments still won’t put a dent in the mountain of debt. As of only two years ago, the fund was only 57 percent funded – having $2.35B in assets to cover $4.13B in liabilities.
Despite several propositions passing in the past to right the ship – Phoenix is still severely underwater. That is because the city has a major spending problem. And instead of addressing this problem, politicians have continued to kick the can down the road, using accounting tricks and other sneaky maneuvers to avoid addressing the crisis.
That is why a group of citizens and Councilman Sal DiCiccio has pushed to get Prop 106 on the August 27th ballot. If approved by voters, this measure will end the budget gimmicks, require honest accounting of pension costs and prioritize paying down the debt of the pension system. The measure will also prohibit the city’s budget from outpacing inflation plus population and put a cap on spending until pension liabilities are funded at 90 percent.
This will put the city’s pension system on a sustainable path and ensure that pension obligations are met.
Prop 106 is a responsible plan for a growing problem that will benefit both taxpayers and retirees. We encourage Phoenix citizens to Vote Yes on Prop 106.