If you received a bill in the mail that contained $700 in hidden fees, you’d be furious ... right? That’s exactly what could happen to you this November if you live in Phoenix.
Voters will be asked to gut the system that provides thousands of Phoenix’s dedicated public servants with a modest, but secure retirement. A recent study by the city’s actuaries show that this pension initiative could cost taxpayers a minimum of $358 million over the next 20 years, a sum that will cost every Phoenix family nearly $700.
Supporters of the pension initiative have funded research to confuse voters and falsely show how the city would save money by gutting traditional pensions and moving to a 401(k)-style plan. The facts prove otherwise.
Michigan made this switch in 1997. The result? Michigan’s unfunded liabilities ballooned from $697 million in 1997 to $4.087 billion in 2010. Alaska moved to a 401(k) type plan for state and public school employees in 2006. The unfunded liabilities increased from $3.8 million in 2006 to $7 billion in 2011. West Virginia made the switch in 1991 and found the enormous economic ramifications so crippling that the state changed back to a defined benefit system in 2006.
Let the experiences of these states be a lesson to us all. We cannot ask Phoenix residents to make a decision of this magnitude without the facts in front of them. Taxpayers deserve transparency.
Proponents of changing the pension system want to keep these costs hidden from you. They and the politicians beholden to them refused to disclose the minimum $358 million impact to taxpayers in the ballot language that will appear on the November ballot; rigging the election by hiding facts from a report the city of Phoenix conducted itself. A decision of this magnitude deserves fair and transparent representation. Without showing the costs up front, Phoenix residents voting on this confusing, costly and poorly-written measure may not know that a “yes” vote on the pension initiative is, in effect, approving a one-third of a billion dollar tax hike for them and all their neighbors.
Voters have already spoken on pensions. In March 2013, voters passed sweeping reforms that are saving the city an estimated $600 million. In addition, the mayor and City Council have addressed the issue of pension spiking, saving the city an additional $233 million in the coming years. This year’s so-called pension reform initiative will cost taxpayers at least $358 million, effectively eliminating almost half of the savings already in place. This new pension initiative is a bad deal the city and its residents can’t afford, and voters have a right to see the price tag.
• Cathy Gleason and Tom Simplot are co-chairs of Phoenix Citizens for Pension Responsibility.